Sunday, August 14

Gold set for first weekly gain in six on slowdown fears


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Gold prices were flat on Friday,

pressured by an uptick in the US dollar and fears over

aggressive rate hikes, although heightened slowdown worries kept

safe-haven bullion on track for its first weekly gain in six.

FUNDAMENTALS

* Spot gold held its ground at $1,717 per ounce, as

of 0114 GMT, after rising more than 1% in the previous session.

Bullion gained 0.6% so far this week.

* US gold futures were up 0.1% at $1,715.50 per

ounce.

* The dollar rose 0.2% against its rivals, making

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greenback-priced bullion more expensive for buyers holding other

currencies.

* The European Central Bank raised interest rates by more

than expected on Thursday as concerns about runaway inflation

Trumped worries about growth.

* Although gold is seen as a hedge against inflation, rising

Interest rates increase the opportunity cost of holding bullion.

* Investors’ focus now shifts to US Federal Reserve policy

meeting due next week where policymakers are expected to raise

interest rates by 75 basis points.

* The number of Americans enrolling for unemployment

benefits rose for a third straight week last week, while factory

activity slumped this month, the newest indications the US

economy is slowing under the weight of rising interest rates and

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high inflation.

* Japan’s core consumer inflation remained above the central

bank’s 2% target for a third straight month in June, as the

The economy faced pressure from high global raw material prices.

* Spot silver was down 0.4% at $18.78 per ounce,

platinum gained 0.3% to $874.50, and palladium

edged 0.1% lower to $1,891.20.

DATA/EVENTS (GMT)

0030 Japan JaibunBK Mfg PMI Flash SA July

0600 UK Retail Sales MM, YY June

0600 UK Retail Sales Ex-Fuel MM June

0715 France S&P Global Mfg, Serv, Comp Flash PMIs July

0730 Germany S&P Global Mfg, Serv, Comp Flash PMIs July

0800 EU S&P Global Mfg, Serv, Comp Flash PMIs July

0830 UK Flash Comp, Mfg, Serv PMIs July

1345 US S&P Global Mfg, Serv, Comp Flash

(Reporting by Brijesh Patel in Bengaluru; Editing by Sherry

Jacob-Phillips)



financialpost.com

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