BENGALURU, Jan 2 (Reuters) – Gold touched its highest in more than six months on Wednesday as sagging equities compounded concerns over weakening global markets, prompting safe-haven flows into the precious metal.
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Spot gold was up 0.2 percent at $1,284.71 an ounce at 1250 GMT, having earlier touched its highest since June 15 at $1,288.66.
U.S. gold futures rose 0.5 percent to $1,287.10.
“We are seeing a very risk-averse market right now,” said Craig Erlam, senior market analyst at OANDA.
Global shares began 2019 on a downbeat note while oil prices and bond yields slid and the Japanese yen strengthened as data from far and wide exacerbated concern over the potential for a global economic slowdown.
Economic and geopolitical concerns mean it is only a matter of time before gold shoots up, said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai.
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Markets are also awaiting views from Federal Reserve Chairman Jerome Powell on the U.S. economic outlook and hints about interest rates in 2019 when he participates in a joint discussion on Friday with former Fed heads Janet Yellen and Ben Bernanke.
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Further pointers are expected this week from a closely watched survey on U.S. manufacturing, due on Thursday, followed by the December payrolls report on Friday.
“People are also expecting a softer dollar in 2019,” OANDA’s Erlam said, adding that gold prices could also be supported by a changing outlook for interest rates.
There are expectations that a three-year rate-hiking cycle in the United States has come to a close, which would be beneficial for non-yielding bullion.
The United States Treasury market fell earlier in the day on assumptions that the Federal Reserve will call a halt to its rate increases.
Among other precious metals, palladium fell 0.5 percent to $1,257.49 an ounce.
Silver was steady at $15.44, having earlier touched its highest since Aug. 3 at $15.51, while platinum fell 0.2 percent to $789.80. (Reporting by Arijit Bose in Bengaluru Editing by David Goodman)
