Dire economic data boosts gold price

Bengaluru — Gold inched higher on Thursday as weak economic data rekindled global growth fears, while bullion’s recovery from four-month lows and an improved technical picture prompted some investors to cover their short positions.

Spot gold was 0.1% higher at $1,276.35 per ounce at 11.30am GMT. US gold futures were steady at $1,278.50 an ounce.

World equity markets slipped as a surprise deterioration in German and South Korean economic data brought back to the fore concerns about a global downturn.

“The correction in markets has provided some support for gold. But, the [gold] market is still looking for catalysts for a significant move and there is not much momentum in either direction,” said Capital Economics analyst Ross Strachan.

“Gold is awaiting bigger developments. We have got US GDP and that’s expected to have a significant impact on the dollar.”

US GDP data will be released on Friday, with the economy forecast to have grown 2.1% in the first quarter.

Gold prices have recovered after hitting a four-month low of $1,265.90 an ounce earlier this week, despite expectations that prices could fall towards the 200-day moving average of about $1,251, analysts said.

“Gold prices are showing some resilience here. We haven’t managed to see an extension to the technical breakout we saw this week,” said Ole Hansen, commodity strategist at Saxo Bank.