Gold prices continue on upward path, rise above US$1,400

Business | 11 Jul 2019 11:43 am

Gold rose for a third day after the Federal Reserve indicated that it’s preparing to cut interest rates for the first time in a decade as the global economy slows, Bloomberg r eports.

Bullion’s trading above US$1,400 an ounce again as investors took note of the Fed’s dovishness, damping doubts over monetary policy easing that arose following stronger-than-expected U.S. payrolls data. Speaking to Congress on Wednesday, Chairman Jerome Powell said June’s jobs report was “great news,” but not enough to tilt the balance because wages weren’t rising fast enough to trigger much inflation.

Gold is trading near a six-year high on the prospects of lower rates, which boost the appeal of non-interest-bearing assets, with geopolitical and trade tensions also spurring demand.

“Although there will be a few bumps on the way given the level of skepticism in the first gold rally cycle, we think there will be an even greater rush for gold in the coming weeks and months,” Stephen Innes, managing partner at Vanguard Markets Pte, said in a note. “So gold prices could stay on an upward path as central banks pivot to an easing stance, the U.S. dollar turns gradually weaker with a more dovish Fed and the burden of harmful yielding debt rises.”

Spot gold climbed by 0.6 percent to US$1,427.23 an ounce, and was at US$1,425.02 at 9:02 a.m. in Singapore.

Bullion hit US$1,439.21 on June 25, the highest level since 2013.

In other precious metals, spot silver added 0.3 percent and platinum gained by 0.3 percent. Palladium advanced by 0.5 percent and is trading near an all-time high reached in March.

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