Precious-safe-haven gold rises on weak data, simmering uncertainty
Gold rose one per cent on Wednesday, supported by a softer dollar and weak US data, as investors grappled with mounting economic and political uncertainty.
Spot gold climbed 0.8 per cent to US$3,378.22 an ounce by 02:02 pm ET (1802 GMT), after rising as much as 1 per cent earlier. US gold futures settled 0.7 per cent higher at $3,399.20.
The US dollar index fell 0.5 per cent, making gold cheaper for buyers holding other currencies, while benchmark US 10-year Treasury yields edged lower.
"The US services sector - two-thirds of the economy - contracting for the first time in a year has goosed gold a percent higher after bullion had shrugged off a weak though historically volatile ADP employment report," said Tai Wong, an independent metals trader.
"A close back above $3,400 will prime a run for new all-time highs."
The Institute for Supply Management said its non-manufacturing purchasing managers index dropped to 49.9 last month, the lowest reading since June 2024, while ADP data showed US private employers added the fewest workers in over two years.
"There is considerable geopolitical uncertainty with Russia-Ukraine, Iran, Syria and China driving people to buy gold... and although traders may not expect gold to rise as quickly, there is still plenty of upside," said Daniel Pavilonis, senior market strategist at RJO Futures.
US President Donald Trump said his Chinese counterpart Xi Jinping was tough and "extremely hard to make a deal with", just days after accusing Beijing of violating an agreement to roll back tariffs.
In addition, Washington doubled tariffs on steel and aluminum imports and urged trading partners to submit their "best offers" to avoid more import levies.
All eyes are on Friday's US payrolls report for clues on the Federal Reserve's next move.
Gold, a safe-haven asset during times of political and economic uncertainty, tends to thrive in a low-interest-rate environment.
Spot silver was down 0.1 per cent at US$34.45, platinum rose 1.5 per cent to US$1,089.99, while palladium lost 1 per cent to US$1,000.55.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
21 minutes ago
- The Sun
Swiss National Bank denies currency manipulation after being put on US watch list
ZURICH: The Swiss National Bank said on Friday it would intervene in foreign currency markets where necessary to keep inflation on track after the United States added Switzerland to a list of countries being monitored for unfair currency and trade practices. The SNB denied being a currency manipulator after the publication of the U.S. Treasury Report on Thursday, but said it would continue to act in Switzerland's interests as the strong franc helped push inflation into negative terrain last month. 'The SNB does not engage in any manipulation of the Swiss franc,' it said. 'It does not seek to prevent adjustments in the balance of trade or to gain unfair competitive advantages for the Swiss economy.' The SNB said it was in contact with U.S. authorities to explain Switzerland's economic situation and monetary policy, and would continue to use interest rates and forex market interventions if necessary to pursue its inflation target of 0-2%. Swiss inflation hit a four-year low in May, with prices falling by 0.1%. The SNB declined to say whether further talks with the United States were planned, but said its monetary policy was 'geared towards the needs of Switzerland.' Switzerland met two of the U.S. Treasury's concerns regarding trade flows and its current account, but not on foreign currency interventions. SNB forex exchange purchases in 2024 were 'minimal,' Treasury said. In 2024, the SNB bought only $1 billion in foreign currencies, equivalent to only 0.1% of Swiss GDP, well below the Treasury's threshold of 2% of economic output. EFG Bank economist GianLuigi Mandruzzato said the SNB would be mindful of the Treasury report, but still pursue its mandate. 'My feeling is that there should be little reason for concern from a Swiss perspective,' he said. 'However, with the Trump administration, anything can happen.'
The Star
29 minutes ago
- The Star
China, HK stocks close down as US-China call offers no clear progress on trade
A screen displays market movements in the Shanghai Stock Exchange. — AFP SHANGHAI: China and Hong Kong stocks ended slightly lower on Friday, as investors remained cautious after a call between U.S. President Donald Trump and Chinese leader Xi Jinping failed to provide clear signals of progress in easing trade tensions. Trump and Xi confronted weeks of brewing trade tensions and a battle over critical minerals in a rare leader-to-leader call on Thursday, leaving key issues unresolved for future talks. "If you look at the conversation between Chinese and U.S. presidents, there's nothing concrete that's positive. So little impact on stocks," said Guo Jianwen, partner at Shanghai-based hedge fund Haiyi Capital. China's blue-chip CSI300 Index fell 0.1%, while the Shanghai Composite Index was flat. Hong Kong benchmark Hang Seng Index dipped 0.5%. For the holiday-shortened week, the CSI 300 Index gained nearly 1%, while the Hang Seng Index rose 2.2%. "The only good news is that things are not getting worse," said William Xin, chairman of Shanghai-based hedge fund Spring Mountain Pu Jiang Investment Management. "If Trump can come to China for a visit in the short term, that would be hugely positive." Chinese markets have lacked clear direction since April 2, when Trump unveiled sweeping reciprocal tariffs, raising fears of a global trade disruption. The blue-chip CSI300 Index has barely budged from the April 2 level, and Hong Kong's benchmark Hang Seng Index gained less than 3% during the period, both lagging the recovery seen among major global markets. Investors should not over-interpret the talk as both sides are still struggling to adapt to each other in a broad confrontational trend, said Charles Wang, chairman, Shenzhen Dragon Pacific Capital Management. Wang said the most significant takeaway from the leaders' exchange was Xi's warning to Trump against provocative actions on Taiwan, which he interpreted as a signal that Beijing is not preparing for a near-term military move. Chinese tech American Depositary Receipts (ADRs) rose just 0.85% in New York overnight following the call, while tech majors listed in Hong Kong fell 0.6%. Onshore non-ferrous metal shares gained 1.1%, and materials stocks listed in Hong Kong jumped 2.4%. China's 10-year and 30-year government bond yields held steady, after the country's central bank said it would inject 1 trillion yuan ($139.23 billion) cash to its banking system via outright reverse repos on Friday. - Reuters
The Sun
32 minutes ago
- The Sun
SNB denies manipulation, vows to defend franc if needed
ZURICH: The Swiss National Bank said on Friday it would intervene in foreign currency markets where necessary to keep inflation on track after the United States added Switzerland to a list of countries being monitored for unfair currency and trade practices. The SNB denied being a currency manipulator after the publication of the U.S. Treasury Report on Thursday, but said it would continue to act in Switzerland's interests as the strong franc helped push inflation into negative terrain last month. 'The SNB does not engage in any manipulation of the Swiss franc,' it said. 'It does not seek to prevent adjustments in the balance of trade or to gain unfair competitive advantages for the Swiss economy.' The SNB said it was in contact with U.S. authorities to explain Switzerland's economic situation and monetary policy, and would continue to use interest rates and forex market interventions if necessary to pursue its inflation target of 0-2%. Swiss inflation hit a four-year low in May, with prices falling by 0.1%. The SNB declined to say whether further talks with the United States were planned, but said its monetary policy was 'geared towards the needs of Switzerland.' Switzerland met two of the U.S. Treasury's concerns regarding trade flows and its current account, but not on foreign currency interventions. SNB forex exchange purchases in 2024 were 'minimal,' Treasury said. In 2024, the SNB bought only $1 billion in foreign currencies, equivalent to only 0.1% of Swiss GDP, well below the Treasury's threshold of 2% of economic output. EFG Bank economist GianLuigi Mandruzzato said the SNB would be mindful of the Treasury report, but still pursue its mandate. 'My feeling is that there should be little reason for concern from a Swiss perspective,' he said. 'However, with the Trump administration, anything can happen.'
