Gold opened the trading week higher on Monday, buoyed by safe-haven bids after Asian equities tumbled to their lowest since 2011 as investors shunned risky assets on the heels of weak U.S. economic data.
U.S. retail sales fell in December along with industrial production, the latest indication that economic growth braked sharply in the fourth quarter. Oil prices slid to the lowest since 2003.
The renewed weakness in the world’s top economy raises doubts about whether the Federal Reserve will raise interest rates again in March, boding well for non-interest bearing assets like gold.
“It will be increasingly difficult for another hike in March, considering that China will continue to be weak,” said Daniel Ang, investment analyst at Phillip Futures. “A further hike may be possible only in the third or fourth quarter.”
The unabated decline in oil prices further fanned worries over a global economic downturn, pushing investors to assets deemed safe including gold, said Ang.
Spot gold was up 0.1 percent at $1,090 an ounce by 0606 GMT, after losing 1.4 percent last week.
U.S. gold for February delivery was flat at $1,089.90 an ounce.
via SOURCE
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Latest posts by Alfonso Esparza (see all)
- Market Rally Still Going Low Holiday Volumes Awaiting Start of 2020 - 27 December 2019
- Market Awaits China Retaliation on Trade - 29 November 2019
- Alibaba to Close Order Book Ahead of Huge IPO - 18 November 2019