Off The Wire
PRECIOUS-Gold rises as share sell-off revives safe-haven buying
* European stocks hit 20-month lows following Wall St slump
* Holdings in SPDR Gold Trust rise for first time since July (Adds quotes, updates prices) By Sethuraman N R BENGALURU, Oct 11 (Reuters) - Gold rose on Thursday, climbing above $1,200 per ounce as sliding global stock markets prompted risk-wary investors to seek out the metal, with a softer dollar also supporting prices. Spot gold gained 0.8 percent to $1,203.92 an ounce by 1149 GMT. U.S. gold futures added 1.2 percent to $1,207.40 an ounce. European stocks fell in line with a slump on Wall Street, pointing to growing risk aversion across global markets and turning greater attention to U.S. inflation data later in the day for clues on the pace of monetary tightening. "Gold is finding a bit of support from the global sell-off seen in equities. If this (sell-off) persists, we will start seeing more of a move to gold as a safe-haven asset," ING analyst Warren Patterson said. "Rising U.S. yields and general strength in the dollar have meant that investors have largely ignored gold. But people are seeing fairly good value at current levels on the back of some macro concerns," Patterson said. Wednesday's dive on Wall Street prompted U.S. President Donald Trump to lash out against the U.S. Federal Reserve for raising interest rates.
Naeem Aslam, chief market analyst at Think Markets UK Ltd, said there was some concern that the Fed's independence may be compromised - a factor seen as supportive to gold. The Fed increased interest rates last month for the third time this year and is widely expected to hike again in December, with no suggestion its tightening will cease any time soon. Gold has fallen more than 12 percent since hitting a peak in April, with investors increasingly switching to the safety of the greenback as the U.S.-China trade war unfolded against a backdrop of rising U.S. interest rates. But the market has managed to stay above a 1-1/2-year low of $1,059.96 hit in mid-August, propped up by limited safe-haven buying at lower levels linked to concerns over economic growth and inflationary pressure from soaring oil prices. Holdings in the SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 1.21 percent to 738.99 tonnes on Wednesday. This was the fund's first gain in holdings since July and the biggest inflow since March. Gold could extend gains if the market cracks resistance between $1,205-$1,215 after multiple attempts, said Fawad Razaqzada, an analyst with Forex.com. "A close above $1,205-$1,215 could pave the way for a rally to the next potential resistance at $1,238." Spot silver rose 0.9 percent to $14.38 an ounce, while palladium was up 1.1 percent at $1,078.30. Platinum edged up 0.2 percent to $820.50 an ounce. (Reporting by Nallur Sethuraman and Arpan Varghese in Bengaluru; Editing by Dale Hudson and Jan Harvey)1-651-848-5832, Outside U.S. +91 8067496031); Reuters Messaging: firstname.lastname@example.org))