Gold scales 2-week peak on Fed rate cut expectations, softer dollar

By: |
Published: July 18, 2019 7:56:08 AM

Spot gold was steady at $1,425.87 per ounce as of 0127 GMT, after hitting its highest since July 3 at $1,428.40.

Gold prices, US Federal Reserve, US-China trade, Wall Street stocks, SPDR Gold TrustU.S. gold futures rose 0.3% to ,427.30 an ounce. (Reuters)

Gold prices rose to their highest in two weeks on Wednesday, as the dollar eased after weaker-than-expected U.S. housing data increased expectations for an interest rate cut by the U.S. Federal Reserve.

FUNDAMENTALS

* Spot gold was steady at $1,425.87 per ounce as of 0127 GMT, after hitting its highest since July 3 at $1,428.40.

* U.S. gold futures rose 0.3% to $1,427.30 an ounce.

* The dollar index was down 0.1 against a basket of major currencies on Thursday, making gold cheaper for investors holding other currencies.

Also read | Global markets: Stocks wobble, bond yields fall on earnings woes, trade worries

* The index had climbed to a one-week peak in the previous session on stronger-than-expected U.S. retail sales. But it nudged lower as Treasury yields fell in the wake of weak U.S. housing market data and concerns about the unresolved U.S.-China trade conflict.

* U.S. homebuilding fell for a  second straight month in June and permits dropped to a two-year low, suggesting the housing market continued to struggle despite lower mortgage rates.

* The Fed is widely expected to lower interest rates by 25 basis points at its policy meeting at the end of the month, with some in the market even betting on a 50 basis points cut.

* The Fed reported on Wednesday that the U.S. economy continued growing at a “modest” rate in recent weeks, with consumers continuing to spend and a “generally positive” outlook overall even in the face of disruptions caused by U.S. trade policy.

* Earlier in the week, U.S. President Donald Trump kept up the pressure on Beijing with a threat to put tariffs on another $325 billion of Chinese goods, amid market nervousness over when face-to-face talks will resume.

* Asian shares wobbled in early Thursday trading as Wall Street stocks dropped on early signs that the U.S.-China trade war could hurt corporate earnings.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.48% to 803.18 tonnes on Wednesday from 799.37 tonnes on Tuesday.

Get live Stock Prices from BSE and NSE 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.