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Wednesday, 17 October 2018 00:00 - - {{hitsCtrl.values.hits}}
BENGALURU (Reuters): Gold held firm near 2-1/2-month highs on Tuesday as dollar weakness offset improved risk appetite among investors, reflected in recovering global stock markets.
Spot gold was up 0.1% at $ 1,228.21 per ounce by 1:12 p.m. EDT (1712 GMT), having peaked $ 1,233.26 in the previous session, its highest since 26 July.
US gold futures were up 0.1% at $ 1,231.90.
“Most of the move in gold is behind us. The Saudi situation seems to be on the mend and stock markets getting an element of support from earnings deprive gold of another reason to rally from here,” said INTL FC Stone analyst Edward Meir.
“Gold is being supported by a relatively softer dollar. ... We could see more of a range-bound market from here.”
The US dollar index dropped to more than two-week lows on Tuesday while emerging market currencies outperformed, and rising stock markets reflected improving risk appetite.
Gold prices were also trading above the 100-day moving average of $1,227, a bullish sign for investors following the technical signal.
“The near-term technical posture for the yellow metal has dramatically improved (over) the past few sessions, which continues to invite the chart-based buyers,” Peter Hug, global trading director at Kitco Metals, said in a note.
“Also, the recent volatility in world stock markets and some heightened geopolitical tensions are continuing to provide some demand for safe-haven gold.”
Gold is usually viewed as a safe store of value during political and economic uncertainty.
Global equities had seen sharp declines over the past couple of days because of factors including the US-China trade tussle, tensions between Saudi Arabia and Western powers, stalled Brexit negotiations and concerns over China’s economy.
Some analysts pointed out that the recent gains in gold could also be attributed to investors unwinding bearish positions after speculators had piled up record short positions.
