Gold surges over 2 pct as share selloff sparks flight to safety
* Gold sees best one-day pct gain since June 2016
* Palladium hits highest since Jan. 26
* Holdings in SPDR Gold Trust rise for first time since July
By Sethuraman N R
BENGALURU, Oct 11 (Reuters) - Gold prices on Thursday jumped
over 2 percent to more than a two-month high as tumbling global
stock markets sent investors rushing to the safe-haven asset.
Spot gold rose 2.6 percent to $1,225.26 as of 2:11
p.m. EDT (1811 GMT), after hitting its highest since July 31 at
$1,226.27. It was also the metal's best one-day percentage gain
since June 2016.
U.S. gold futures settled up $34.20, or 2.87 percent,
Bullion broke above a narrow trading range it has been stuck
in for the past 1-1/2 months, triggering fresh buying interest
and forcing investors to cover their short positions, analysts
Wall Street extended its slide to a sixth session on
Thursday after European stocks slumped to a 21-month low,
pointing to growing risk aversion across global markets.
"A lot of people are running to gold as a safe-haven trade,
diversifying into the asset and selling the dollar," said
Michael Matousek, head trader at U.S. Global Investors.
"Now that gold has broken through the strong resistance
level at $1,210, a lot of new long positions are coming in."
Meanwhile, U.S. President Donald Trump, for a second day,
criticized the Federal Reserve on Thursday, calling its interest
rate increases a "ridiculous" policy that was making it more
expensive for his administration to finance its growing
The Fed increased rates last month for the third time this
year and is widely expected to raise them again in December.
"As a stock market selloff continues, gold is once again a
desired destination in times of uncertainty. The metal had lost
some cache in minds of investors, but when there is no clear
safe haven. Funds are flowing to gold," said Alfonso Esparza,
Senior Market Analyst at OANDA.
Gold has fallen more than 10 percent from a peak in April,
with investors increasingly switching to the safety of the
greenback as the U.S.-China trade war unfolds against a backdrop
of rising U.S. interest rates.
But prices have recovered from a 1-1/2-year low of $1,059.96
hit in mid-August, propped up by limited safe-haven buying at
lower levels linked to concerns over economic growth and
inflationary pressure from soaring oil prices.
Holdings in the SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, rose 1.2 percent to 738.99
tonnes on Wednesday, the first gain since July and the biggest
inflow since March.
Silver rose over 2 percent to $14.56.
Palladium rose 1.4 percent to $1,082.22, after
hitting its highest since Jan. 26 at $1,096.80.
Platinum climbed 2.5 percent to $839.74, after
touching its highest since July 26 at $843.90.
(Reporting by Nallur Sethuraman, Arpan Varghese and Swati Verma
in Bengaluru; Editing by Marguerita Choy and Adrian Croft)
First Published: 2018-10-11 03:27:46
Updated 2018-10-11 20:55:06
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