|15 August, 2019

Gold prices climb as U.S. bond markets warn of recession

Spot gold was up 0.3% at $1,520.19 per ounce

Image used for illustrative purpose. An employee sorts gold bars in the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna, Austria, December 15, 2017.

Image used for illustrative purpose. An employee sorts gold bars in the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna, Austria, December 15, 2017.

REUTERS/Leonhard Foeger

Gold prices rose on Thursday as an inverted U.S. bond yield curve alarmed investors about rising recession risks, while the protracted Sino-U.S. trade war added to fears of a global economic slowdown, increasing the appeal for safe-haven assets.

FUNDAMENTALS

* Spot gold was up 0.3% at $1,520.19 per ounce at 0100 GMT.

* U.S. gold futures fell 0.1% to $1,526.80 an ounce.

* The U.S. Treasury yield curve temporarily inverted on Wednesday for the first time since 2007, an indication that is widely seen by investors as a sign of an upcoming U.S. recession.

* Economic data from China and Germany suggested a slowing global economy, hit by the unabating U.S.-China trade war, Brexit and geopolitical tensions.

* On Wednesday, U.S. officials said China has made no trade concessions after U.S. President Donald Trump postponed the 10% tariffs on over $150 billion worth of Chinese imports, the latest sign that efforts to reach a trade deal were going nowhere.

* The MSCI All Country World Price index, which incorporates readings of 49 equity markets across the world, shed 2.1% to its lowest level since June 4.

* The dollar index, which measures its value against a basket of six major currencies, was little changed after a 0.2% gain on Wednesday.

* Investors are focused on the Federal Reserve's annual symposium next week. Traders see an about 74% chance of a 25 basis-point rate cut by the Fed this September.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.91% to 844.29 tonnes on Wednesday.

DATA AHEAD (GMT)

* 0130 Australia Employment July

* 0830 UK Retail Sales MM, YY July

* 1000 EU Reserve Assets Total July

* 1230 US Initial Jobless Claims Weekly

* 1230 US Philly Fed Business Index August

* 1230 US Retail Sales MM July

* 1315 US Industrial Production MM July

(Reporting by Harshith Aranya in Bengaluru; Editing by Shounak Dasgupta)

© Reuters News 2019

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