adminSINGAPORE — Gold retained overnight gains yesterday to trade near its highest in four weeks as investor appetite for riskier assets eased amid global growth worry, while a softer dollar also underpinned prices of the metal.A sell-off in the stock markets saw gold-backed exchange-traded funds (ETFs) attract investors for the first time in a month after heavy outflows.
Spot gold eased slightly to $1 234,05/oz by early this morning, but remained close to a four-week peak of $1 237,30 hit on Monday, when the metal gained more than 1 percent.
“(Our) gold exchange-traded products saw their first inflows in a month as dovish Federal open Market Committee minutes led to dollar weakness, while weak German data renewed interest in the hard defensive assets,” ETF Securities’ head of Australia and New Zealand operations, Danny Laidler, said.
“Last week’s bounce (in gold) could trigger a short-covering rally helping to sustain momentum in the upward trend,” he said.
The firm saw inflows of $18,3 million last week into gold exchange traded products, while the top gold ETF SPDR Gold Trust saw an inflow of 1,79 tonnes on Monday — its first inflow since September 10.
The inflows come as Fed officials expressed concern that a sharp slowdown in the global economy could delay an increase in US interest rates, according to minutes of the latest Fed meeting released last week.
Higher rates would have boosted the dollar, but dented the appeal of non-interest-bearing gold.
Those remarks followed soft industrial data out of Germany, the eurozone’s biggest economy, and lowered global growth forecasts by the International Monetary Fund last week. Gold posted its best week in nearly four months last week, as the dollar fell after a 12-week winning streak.- Reuters.
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