June 9, 2020 / 9:50 AM / 2 months ago

PRECIOUS-Gold gains as stock market rally fizzles

    * As gold breaks $1,700, recovery likely to continue
-analyst
    * Fed statement due at 1800 GMT on Wednesday
    * Palladium down 30% from February's record peak

 (Updates prices)
    By K. Sathya Narayanan
    June 9 (Reuters) - Gold prices rose on Tuesday as a pullback
in equities increased the appeal of the safe-haven metal while
investors awaited the U.S. Federal Reserve's two-day monetary
policy meeting starting later in the day.
    Spot gold        gained 0.7% to $1,705.77 an ounce by 1150 
GMT, climbing for a second straight session. U.S. gold futures
        rose 0.6% to $1,715.50.
    "Stock markets aren't rising any further, or at least not
meaningfully, and that is taking pressure away from gold," said
Commerzbank analyst Daniel Briesemann.
    European shares eased as declines in British American
Tobacco          and banking stocks halted a rally driven by
hopes of economic recovery.                  
    "We are seeing a temporary return of risk-off ... gold is
gaining strength as liquidity flows back into bullion markets
despite the recovery of the greenback," ActivTrades chief
analyst Carlo Alberto De Casa said in a note.       
    As gold has broken through the resistance level of $1,700,
recovery seems likely to continue if there are further declines
on stocks, De Casa added.
    Gold prices fell last Friday to $1,670.14, their weakest in
more than a month after an unexpected jump in U.S. employment
numbers signalled that an economic recovery was under way.
    Traders have stopped pricing in the possibility of negative
interest rates in the United States and are now focused on the
Fed's monetary policy meeting for guidance on how the world's
biggest economy can recover after the coronavirus.             
    In other precious metals, silver        dropped 1.6% to
$17.58 an ounce while platinum        slipped 0.9% to $824.87.
    Palladium        fell 3.1% to $1,961.10, with prices of the
metal used in autocatalysts now down more than 30% from a record
peak in late February.
    "The (palladium) market could be more or less balanced due
to the very low demand from the automotive industry, and that is
probably keeping a check on prices," Commerzbank's Briesemann
said. 

 (Reporting by K. Sathya Narayanan in Bengaluru
Additional reporting by Swati Verma and Eileen Soreng
Editing by Susan Fenton and David Goodman)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below