Gold is steady amid worry over global economic outlook

Bengaluru — Gold was little changed on Wednesday, as concern over global economic outlook offset pressure from signs of progress in US-China trade negotiations, while investors await a speech from US Federal Reserve chair Jerome Powell.

Spot gold was flat at $1,928.35/oz by 3.06am GMT. US gold futures rose 0.6% to $1,934.70.

“All eyes are on what Powell says this week … there are still a lot of concerns about the economy and they continue to indicate that rates are going be low and stimulus measures will continue, which should boost gold,” said ANZ analyst Daniel Hynes.

“The US-China trade news overnight that the tensions have eased slightly has dulled investors appetite for safe-havens a bit but obviously there is a lot of water to go under that bridge.”

Adding to investor concern, a survey from the Conference Board showed US consumer confidence unexpectedly fell in August to hit a six-year low.

Markets now await Powell’s speech at Jackson Hole on Thursday, which is expected to provide further clarity on the US central bank’s view on inflation and monetary policy.

The Fed has slashed interest rates near zero and has rolled out a wave of stimulus measures to help the virus-hit economy, driving investors towards the safe-haven metal as it is viewed a hedge against inflation and currency debasement fears.

“Gold prices have found strong support at around $1,910,” said DailyFx strategist Margaret Yang. “The mid-to-long-term prospect for gold remains bullish, given the presidential election, US-China trade frictions risks and ultra-loose monetary conditions.”

Top US and Chinese trade officials reaffirmed their commitment to a phase 1 trade deal, which has seen China lagging on its obligations to buy US goods, giving a boost to stock markets.

Elsewhere, silver fell 0.3% to $26.35/oz, platinum eased 0.1% to $926, and palladium slipped 0.7% to $2,149.97.

Reuters