Tags: gold | metals | IMF | bullion

Gold Rises After IMF Cuts Global Forecast, German Data Lag

Tuesday, 07 Oct 2014 02:09 PM

Gold rose on Tuesday as its safe-haven appeal increased after the International Monetary Fund cut its global economic growth forecasts and weak German industrial data stoked further growth concerns.

Bullion climbed as global equities and the dollar fell after the IMF warned of weaker growth in core euro zone countries, Japan and big emerging markets like Brazil.

Gold posted a sharp reversal on Monday as the dollar's sharp retreat sparked fresh physical demand and short covering after bullion earlier hit a 15-month low.

"Following yesterday's rally, traders are in a wait-and-see attitude now after the IMF lowered world growth and issued some market risk warnings," said George Gero, vice president at RBC Capital Markets.

Spot gold was up 0.4 percent at $1,211.65 an ounce by 1:19 p.m. Eastern time. It jumped 1.3 percent on Monday in its biggest one-day gain in two months.

A four-year high in the dollar index driven by a strong U.S. economic outlook sent gold near four-year low at $1,180 an ounce last week.

U.S. Comex gold futures for December delivery were up $4.50 at $1,211.80 an ounce.

Also underpinning gold was a far more-than-expected drop in German industrial output in August, when it posted its biggest decline since the financial crisis in early 2009.

In the retail gold market, private investor sentiment toward the metal in September climbed as bullion's drop below $1,200 an ounce triggered renewed demand, according to a survey by online precious metals market BullionVault.

The Gold Investor Index, which measures the balance of customers adding to gold holdings over those reducing them, climbed to a seven-month high of 53.4 in September from 51.7 in August. A reading of 50 signals an equal number of net gold buyers and sellers.

Traders were also eying the return of Chinese buyers on Wednesday. China, the top buyer of gold, has been away since the beginning of the month for its National Day holiday.

Palladium rose 3.1 percent to $784.50 an ounce, its biggest one-day gain in over six months, helped by short covering after the metal fell to its lowest level since Feb. 27 on Monday. The metal has also dropped 17 percent from $910 last month, which was its highest level since Feb. 2011.

Platinum was up 1.6 percent at $1,258.75 an ounce.

Silver eased 0.3 percent to $17.24 an ounce. It hit its weakest level since March 2010, at $16.66, on Monday.

© 2017 Thomson/Reuters. All rights reserved.

 
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Gold rose on Tuesday as its safe-haven appeal increased after the International Monetary Fund cut its global economic growth forecasts and weak German industrial data stoked further growth concerns. Bullion climbed as global equities and the dollar fell after the IMF warned...
gold, metals, IMF, bullion
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2014-09-07
Tuesday, 07 Oct 2014 02:09 PM
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