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Gold Remain Steady After Rising 1% Amid Recession Fears

Gold sustained steadiness on Wednesday after rising 1% in the previous session, with prices fluttering near a more than six-year excessive on intensified fears of a worldwide recession following light U.S. data, the extended Sino-U.S. trade war, and Brexit contingencies.

Spot gold slipped 0.2% to $1,543.02 per ounce at 0407 GMT, however near last week’s $1,554.56, its highest since April 2013.

U.S. gold futures had also been down 0.2% at $1,552.4 an ounce.

Spot silver was up 0.7% to $19.37 per ounce, after hitting $19.57 earlier, its highest since September 2016.

With no agreement on the Sino-U.S. trade front, investors stay nervous, mentioned Michael McCarthy, chief market strategist at CMC Markets, including that contingencies following a parliamentary vote within the U.K. are positive for gold.

Adding to gold’s safe-haven charm was U.S. manufacturing data that confirmed activity contracted for the first time in last three years and last month and President Donald Trump’s risk that he could be “tougher” on China in a second term if trade talks dragged on.

Traders have virtually absolutely priced in a 25 basis level interest rate cut at the Federal Reserve’s assembly later this month, under CME’s FedWatch device.

Lower interest rates scale back the opportunity cost of holding non-yielding bullion and weigh on the dollar.

Spot gold faces a resistance at $1,546 per ounce, a break above which could lead to a gain into the vary of $1,568-$1,595, based on Reuters technical analyst Wang Tao.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 1.34% to 890.04 tonnes on Tuesday.

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