Gold clings near 3-month peak

MANILA (TIP): Gold stayed near a three-month top on Thursday after marking its best day in two weeks, buoyed by expectations that global economic and financial headwinds could make it tough for the US Federal Reserve to raise interest rates in the near term.

Gold has benefited from the uncertainty on the timing of the next US rate hike, burnishing its safe-haven draw that has been on full display since the year began as investors shunned risky assets.

Spot gold was little changed at $1,140.90 an ounce by 0226 GMT, after rising as high as $1,145.60 on Wednesday, its loftiest since October 30.

Gold rallied 1.2% overnight, the biggest single-day gain since January 20. The metal has risen nearly 8% so far this year. William Dudley, president of the Federal Reserve Bank of New York, said financial conditions have tightened considerably and the weakening global outlook could have “significant consequences” to the US economy.

Those comments dragged down the dollar overnight, adding to market expectations that the Fed is unlikely to raise rates again in March. US rates rose for the first time in nearly a decade in December.

BMI Research, part of ratings agency Fitch, said gold is now increasingly likely to move between $1,000 and$1,200 instead of pushing below $1,000 this year as it had previously thought.

“The Federal Reserve will keep monetary policy looser than previously anticipated in the months ahead as global economic headwinds prompt officials to postpone their hiking plans until the second half of 2016,” BMI told clients in a note. Also cooling US rate hike views, activity in the U.S. services sector slowed to a near two-year low in January. US gold for April delivery was flat at $1,141.50 an ounce.

Holdings of top gold-backed exchange-traded fund, SPDR Gold Trust, continued to rise, standing at 22.19 million ounces on Wednesday, the highest since late October.

Source: Reuters


Did You Know?


Ingredients 1).Fish of your choice. Divided in large chunks.Pomfret is a popular choice here. 2). 3-4 banana leaves 3).4 tablespoons of lemon juice 4). 2 tablespoon of...