Bengaluru: Gold rose on Monday as fears of a slowdown in global economic growth and uncertainty surrounding the US interest rate trajectory bolstered the metal’s appeal ahead of a G20 meeting, with the focus on US-China trade tensions.
Spot gold rose 0.3 per cent higher to $1,226.0 per ounce by 0834 GMT. US gold futures were up about 0.4 per cent at $1,227.5 per ounce.
“People are moving some capital into gold at this time, given the uncertainties around the pace of rate hikes by the US Federal Reserve, the US-China trade war,” said Brian Lan, managing director at Singapore dealer GoldSilver Central.
US President Donald Trump and Chinese President Xi Jinping are expected to meet on the sidelines of a G20 summit in Argentina at the end of this week.
Officials from some G20 countries, anxious to see a swift end to the Sino-US trade war, are hopeful but not confident that the meeting may yield at least a partial ceasefire.
“The growing unease regarding the G20 summit and the possibility of a deal has seen gold prices hold up relatively well,” analysts at ANZ said in a note.
However, analysts said gold’s direction in the near term will largely be dictated by the dollar’s movement, which has significantly dented bullion’s appeal as a safe haven during political and economic uncertainty.
Gold declined over 10 per cent from a peak in April while the dollar gained as the trade tussle unfolded against a backdrop of higher US interest rates.
The dollar index, which measures the greenback against a basket of six major currencies, was 0.1 per cent lower.
Meanwhile, Asian stocks posted modest gains although overall risk appetite was tempered by a recent rout in oil markets.
The US Fed’s Federal Open Market Committee will also release the minutes from its November 7-8 policy meeting later this week. The market will look for any discussion of what conditions might bring about a Fed pause.
Fed Chairman Jerome Powell will speak on Wednesday while vice-chairman Richard Clarida’s speech is due on Tuesday.
“Looking at some economic data earlier this month — such as US jobs data, which showed some stagnancy in growth — if there is any such threat to the data points, we may see the interest rate scenario becoming slightly dovish,” said Ajay Kedia, director at Kedia Commodities in Mumbai.
Among other precious metals, silver climbed 1.2 per cent to $14.41 an ounce and platinum rose 0.7 per cent to $842.65.
Palladium gained 1.3 per cent at $1,133.99 an ounce.
Prices fell about 3 per cent in the previous session, their biggest one-day percentage decline since August 15.