Gold price hits two-week high as weak U.S. data lifts likelihood of Fed pause
New York (Feb 15) Gold gained 0.5 percent in the previous session after weak U.S. retail sales data, along with soft inflation numbers on Wednesday, added to disquiet about slowing growth, which could allow the Fed to hold interest rates steady for a while. The disappointing U.S. data followed a spate of weak economic reports from China and Europe. This helped gold to hold its ground amid a slight rebound in the dollar , which stayed close to a two-month peak against a basket of currencies, with the market awaiting developments in trade talks between Washington and Beijing. Two White House negotiators will meet with Chinese President Xi Jinping later on Friday, U.S. President Donald Trump's economic adviser, Larry Kudlow, said on Thursday. "The market is just waiting for a breakthrough. So long as China-U.S. trade concerns are lingering in the market, investors are in ambiguity about where they should go," said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade.
Investors have generally looked to the dollar in the search for safety from the trade dispute, strengthening the currency and making dollar-priced gold costlier for buyers holding other currencies. Also offering limited support to bullion was the continuing uncertainty surrounding Brexit, with increasing expectations that Britain could leave the European Union next month without a deal, analysts said. "Bullion is still trading in a lateral channel between $1,300 and $1,325. A rise above the intermediate resistance placed at $1,315/$1,316 will offer a first positive impulse, opening the floor to another attack to $1,325," ActivTrades chief analyst Carlo Alberto De Casa said in a note. In other precious metals, palladium was up 0.5 percent at $1,422.44 an ounce, on track for a second consecutive weekly gain. Platinum gained 0.5 percent to $789.69 but was set for a second straight weekly fall. Silver firmed by 0.1 percent to $15.64 but was also heading for its second weekly decline, down about 1 percent so far.
Reuters
