Gold rises on poor Chinese trade data and flat dollar

Bengaluru — Gold rose on Friday and was on track to post a weekly gain, supported by an easing dollar and weaker-than-expected Chinese trade data, which stoked global growth concerns.

Spot gold was up 0.3% at $1,408.27 an ounce at 11.36am GMT. Gold has risen about 0.6% so far this week. US gold futures rose 0.2% to $1,409.8 an ounce.

“We have [China’s] trade data out this morning which disappointed mainly on the import side, suggesting the Chinese economy is still struggling,” said Julius Bär analyst Carsten Menke. “This provided fuel to the growth worries, so that’s why gold as a safe haven is benefiting.”

China’s exports fell in June as the US ramped up trade pressure, while imports shrank more than expected, pointing to further strains on the world’s second-largest economy.

Also helping gold was the dollar index, which eased for a third straight session as stronger-than-expected US inflation data failed to shake convictions that the Federal Reserve will start cutting interest rates this month.

Despite the robust core US consumer price index (CPI) data, money markets still indicated one rate cut at the end of July and a cumulative 64 basis points in cuts by the end of 2019.

“The comments from the Fed and the minutes this week were on the dovish side and have given the market hope that there might be a chance of a 50-basis-point cut,” said ABN Amro analyst Georgette Boele.

Fed chair Jerome Powell indicated on Thursday that a rate cut is likely at the Fed’s next meeting as businesses slow investment due to trade disputes and their impact on global growth.