(Reuters) – Gold prices rose on Monday and stayed above the key $1,500 per ounce psychological level, as stock markets slipped on concerns about global economic growth and the U.S.-China trade dispute, triggering safe haven bids.
An employee takes granules of 99.99 percent pure gold at the Krastsvetmet non-ferrous metals plant, one of the world’s largest producers in the precious metals industry, in the Siberian city of Krasnoyarsk, Russia November 22, 2018. REUTERS/Ilya Naymushin/Files
Spot gold was up 0.6% at $1,505.26 per ounce at 12:04 p.m. EDT (1611 GMT), holding close to last week’s more than six-year high of $1,510. U.S. gold futures were up 0.5% at $1,516.60 an ounce.
“We have a little weakness in the equity markets globally this morning so certainly we have continued safe haven bids for gold,” said David Meger, director of metals trading at High Ridge Futures.
“With continued disruptions in Hong Kong during the weekend, trade tensions and global central bank easing, it’s not hard to understand why gold prices remain supported,” Meger added.
U.S. stocks were dragged down by financial stocks, as investors shunned risky bets on fears that a drawn-out U.S.-China trade war could force the global economy into recession.
U.S. President Donald Trump said on Friday he was not ready to make a deal with China and called the planned September round of trade talks into question. Trump had earlier pledged to tax an additional $300 billion worth of Chinese imports, effective on Sept. 1.
Gold prices rose as much as 4% last week and are up about 17% this year.
“Anything is possible (with gold prices), if the trade negotiations deteriorate further prices can go even higher,” said Miguel Perez-Santalla, vice president of Heraeus Metal Management in New York.
Analysts said negative debt yields around the globe were further supporting bullion. Non-interest-bearing gold tends to benefit when yields on other assets are low.
Investors are focused on the Federal Reserve annual symposium in Jackson Hole, Wyoming, next week, with investors seeking greater clarity on the path of interest rates. Traders see a 74% chance of a 25 basis-point rate cut by the U.S. central bank this September.
Hedge funds and money managers raised their bullish stance in COMEX gold in the week to Aug. 6, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Silver was up 0.7% at $17.05 per ounce. Platinum was down 0.1% at $858.01 per ounce, while palladium gained 1.3% to $1,439.91 an ounce.
Reporting by Sumita Layek in Bengaluru; Editing by Will Dunham and Richard Chang