Gold prices inched up on Wednesday, after rising as much as 1% in the previous session, as dismal U.S. manufacturing data fanned fears of a sharp global economic slowdown and stoked bets of further interest rate cuts.
Spot gold was up 0.1% at $1,479.43 per ounce, as of 0121 GMT. Prices hit a near two-month low of $1,458.50 on Tuesday, before climbing as much as 1% during the session.
U.S. gold futures were down 0.2% at $1,485.4 an ounce.
U.S. manufacturing activity tumbled to a more than 10-year low in September as lingering trade tensions weighed on exports, further heightening financial market fears of a sharp slowdown in economic growth in the third quarter.
Against a basket of currencies the dollar was slightly weaker, while global shares retreated to one-month lows on Wednesday.
U.S. President Donald Trump once again lashed out at the Federal Reserve on Tuesday, in the wake of the weak manufacturing sector data, saying the central bank has kept interest rates “too high” and that a strong dollar is hurting U.S. factories.
Fed has set monetary policy to where it can deliver on its 2% inflation goal and there is scope to raise rates slightly over the next few years if the economy continues to grow, Chicago Fed President Charles Evans said on Tuesday.
Manufacturing activity in the euro zone contracted at its steepest rate in almost seven years last month, according to a survey on Tuesday that suggested there would not be a turnaround any time soon.
The European Central Bank’s President Mario Draghi called on Tuesday for euro-area-wide fiscal stimulus aimed at boosting investment, saying the latest steps in this direction are insufficient.
The World Trade Organization cut its forecast for growth in global trade this year by more than half on Tuesday and said further rounds of tariffs and retaliation, a slowing economy and a disorderly Brexit could squeeze it even more.
Prime Minister Boris Johnson will on Wednesday unveil his final Brexit offer to the European Union and make clear that if Brussels does not engage with the proposal, Britain will not negotiate further and will leave on Oct. 31.
Gold production in Russia rose 10.5% in the first six months of 2019 to 135.33 tonnes from 122.50 tonnes in the same period a year earlier, Russia’s finance ministry said on Tuesday.
DATA AHEAD (GMT)
0500 Japan Consumer Confidence Index Sept
0830 UK Markit/CIPS Cons PMI Sept
1215 U.S. ADP National Employment Sept
1245 U.S. ISM-New York Index Sept
1245 U.S. ISM NY Biz Conditions Sept (Reporting by Eileen Soreng in Bengaluru; Editing by Aditya Soni)
© Reuters News 2019