ANOTHER CRYPTOCURRENCY: US precious metals dealer Anthem Vault Inc said it has launched the first digital currency backed by physical gold, with an aim to increase the use of bullion as an accepted form of electronic money. — Reuters
BENGALURU: Gold prices climbed on Monday, holding ground near a six-month high hit last week, as investors remained concerned about political uncertainty in the United States and global economic slowdown.
Spot gold was up 0.6 percent at $1,263.91 per ounce as of 0458 GMT. The metal had hit its highest since early July at $1,266.40 on Thursday.
U.S. gold futures were up 0.7 percent at $1,267.4 per ounce.
A partial U.S. government shutdown was almost certain to drag through the Christmas holiday after the Senate adjourned on Saturday without breaking an impasse over President Donald Trump’s demand for more funds for a border wall.
Signs of political instability in the United States at a time when the global economy is weakening sent equities sliding, further boosting demand for gold.
“Prices are likely to remain strong,” said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.
“Investors will start allocating some funds to gold considering that global growth is slowing and equity markets remain muted. If one has to seek refuge in these ongoing crises, gold is a good option.”
The Japanese yen and the Swiss franc, which are considered a safe bet during times of economic and political stress, also gained as investors’ appetite for risk assets waned.
Also supporting the bullion was speculation that the U.S.
Federal Reserve could adopt a less aggressive monetary policy going forward, said Shah.
Fed Chairman Jerome Powell had said last week that policymakers would be ”patient” in determining future rate hikes amid expectations the U.S. economy will slow next year and inflation likely to stay below the Fed’s 2 percent target next year.
Fresh economic forecasts showed officials at the median now see only two more rate hikes next year compared to the three projected in September.
“We are seeing small physical demand and short-covering in gold,” said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong, adding activity was thin before Christmas.
“We can see support around $1,250. Prices are likely to stay around the current levels until the end of this year.” Hedge funds and money managers raised their net long positions in Comex gold to a six-month high in the week to Dec. 18, indicating improved interest in the metal.
Also, holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.5 percent to 772.67 tonnes on Friday.
Among other metals, palladium inched 0.1 percent higher to $1,233.00 per ounce. Silver rose 0.9 percent to $14.73, while platinum gained 0.6 percent to $791.70 per ounce. -Reuters
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