Gold inches above $1,500 level as investors lose their appetite for risk

Bengaluru — Gold edged up on Monday, to hold above the psychological $1,500 level, as investors’ demand for safe-haven bullion increased on the concern over slowing global economic growth as the trade war between Washington and Beijing drags on.

Spot gold was up 0.5% at $1,503.66/oz at 10.56am GMT, while US gold futures were also up 0.5% at $1,515.70/oz.

“Gold is trying to rebound due to fears of slowdown in the global economy and the trade talks [between the US and China] are not going in the best ways,” ActivTrades analyst Carlo Alberto De Casa said, adding the “there is still room for gold to go up”.

US President Donald Trump said on Friday he was not ready to make a deal with China and even called the September round of trade talks into question.

Meanwhile, yen and bond bulls charged while stocks struggled again, amid the worry that a prolonged US-China trade war and damaging Brexit could tip top economies into recession.

With no sign of trade tensions between the US and China abating, MKS Pamp said in a note that gold could continue to build momentum, while global growth concerns and central bank easing were also helping the rally.

Analysts also said negative debt yields around the globe were further supporting bullion.

Gold prices rose as much as 4% last week and are up about 17% in 2019.

“To achieve higher [gold] prices we need more negative surprises in the economic, financial and geopolitical side. If we don’t see further escalation [in trade tension], we are likely to see gold prices treading water or come under more pressure,” Commerzbank analyst Eugen Weinberg said.

Market focus is now on the Federal Reserve annual symposium at Jackson Hole later in the week, with investors seeking greater clarity on the future path of interest rates. Traders see a 69% chance of a 25 basis-point rate cut by the US central bank this September.

Spot gold may gain further to $1,524/oz, as it has cleared resistance at $1,497, Reuters technical analyst Wang Tao said.

Hedge funds and money managers raised their bullish stance in Comex gold in the week to August 6, the US Commodity Futures Trading Commission (CFTC) said on Friday.

Elsewhere, silver was steady at $16.94/oz. Platinum was down 0.4% at $855.54, while palladium gained about 0.4% to $1,426.51/oz.