Gold price near 3-1/2 month high on bets US Fed to delay rate hike

By: |
Singapore | Published: October 15, 2015 8:26:10 AM

Gold price held near a 3-1/2-month high on Thursday as sluggish economic data from China and the United States stoked speculation the Federal Reserve will not raise rates this year.

gold priceGold is a non-yielding asset and tends to benefit from ultra-low rates. It also benefited as the dollar on Wednesday slumped to its lowest since late August against a basket of major currencies. A weaker dollar makes gold cheaper for holders of other currencies.
(Express Photo)

Gold price held near a 3-1/2-month high on Thursday as sluggish economic data from China and the United States stoked speculation the Federal Reserve will not raise rates this year.

Spot gold was little changed at $1,185 an ounce by 0022 GMT following a four-day rally. The metal climbed to $1,190 on Tuesday, its highest since June 22.

Data on Wednesday showed U.S. retail sales barely rose in September and producer prices recorded their biggest decline in eight months, indicating the economy was losing momentum amid slowing global growth.

Earlier in the day, China data showed consumer inflation cooled more than expected in September while producer prices extended their slide to a 43rd straight month, adding to concerns about deflationary pressures in the world’s second-largest economy.

Investors believe the weakening backdrop in the U.S. and elsewhere may cause Fed policymakers to delay the first rate increase in nearly a decade, earlier expected late in 2015.

Gold is a non-yielding asset and tends to benefit from ultra-low rates. It also benefited as the dollar on Wednesday slumped to its lowest since late August against a basket of major currencies. A weaker dollar makes gold cheaper for holders of other currencies.

Elsewhere, Elliott Management Chief Executive Paul Singer said on Wednesday every institutional portfolio should be 5-10 percent invested in gold to protect against zero interest rates that are degrading the value of paper currency.

Among other precious metals, silver hit a 3-1/2-month high of $16.18 an ounce on Thursday before easing slightly. Platinum climbed to a five-week high of $999, before giving up gains to trade down 0.2 percent. Palladium edged up.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Home delivery of petrol, CNG: Govt mulling new retailing model to make all fuels available at one place
2Gold prices jump today as investors seek safe-haven assets amid heightened US-China tensions
3Uttar Pradesh clocks highest ever sugar production