Gold futures prices edge higher about $10 on Tuesday as global equities markets falter on mounting expectations that the Fed will likely go ahead with an interest rate increase this month.
Asian stock markets fell on Tuesday, with the Shanghai Composite fell 1.2%, while the appetite for riskier assets undermined after a couple of reports on China’s manufacturing sector added to signs that the second largest economy world be slowing.
In Europe, Germany’s DAX fell more than 2.5%, while the Dow and the S & P 500 marked drop by at least 2% at the open, as fears of a global economic slowdown led by China, traders and shook feeling scared.
Today on the Comex, Gold for December delivery jumped $10.40, or 0.92%, to trade at $1,142.90 a troy ounce. Spot gold was up 0.5 per cent at $1,139.60 an ounce, after an uneventful session on Monday.
Fed Vice Chairman Stanley Fischer said on Saturday that inflation in the US is likely that rebound such as pressure from the molten dollar, allowing the US central bank to raise the interest rates gradually.
Fischer’s comment sent Wall Street lower overnight and US futures extended losses on Tuesday, with Asian stocks also fell, led by China. The dollar weakened similarly as risk aversion favored way the euro and the yen.
In the meantime, investors looked in advance to Friday US August employment report, which could assist in providing clarity about the probability of a rise in the interest rates in the short term.
Bullions ended August 1 3.5 percent higher than concerns about China’s economic slowdown triggered safe-haven bids, although the metal has emerged from a seven-week high above.
Mounting evidence that the Fed would raise interest rates at its next policy meeting on Sept. 16 to 17 could limit the upside potential of gold.
Indian stock markets dropped by 2.2% to 25,696.44 for a second day, the lowest since 11 August 2014.
Analysts said the rise in gold prices at futures trade was mostly in line with a firming trend overseas, at the Multi Commodity Exchange, gold for delivery in October was up by Rs 175, or 0.66%, to Rs 26,857 per 10 gram.
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