Gold price up for second day on Chinese data renews growth concerns

Gold rose for a second session on Monday, as slowing economic growth in China and weakness in Asian stock markets lifted the safe-haven appeal of the precious metal.

Reuters| Updated: May 16, 2016, 13:20 PM IST
Gold price up for second day on Chinese data renews growth concerns

Singapore: Gold rose for a second session on Monday, as slowing economic growth in China and weakness in Asian stock markets lifted the safe-haven appeal of the precious metal.

Spot gold gained 0.6 percent to USD 1,281.40 an ounce by 0729 GMT, while US gold futures added 0.8 percent to USD 1,282.90 an ounce.

"In the second quarter, USD 1,300 to USD 1,400 is a fairly reasonable price for gold as the central banks are not going to raise interest rate any time soon," said Mark To, head of research at Wing Fung Financial Group in Hong Kong. "I think overall sentiment is very positive for the gold market."

China`s investment, factory output and retail sales all grew more slowly than expected in April, adding to doubts about whether the world`s second-largest economy is stabilising, data released on Saturday showed.

Gold has gained around 20 percent this year after weak economic data in the United States and elsewhere eased expectations of a near-term increase in US interest rates.

Higher rates would lift the opportunity cost of holding non-yielding gold.

Still, stronger-than-expected US economic data last week renewed expectations the Federal Reserve will hike rates more than once this year, capping gains in precious metals.

US retail sales in April recorded their biggest increase in a year as Americans stepped up purchases of automobiles and a range of other goods, suggesting the economy was regaining momentum after growth almost stalled in the first quarter.

Two Fed officials said the central bank should raise rates if data points to an improving economy.

Among other precious metals, spot silver advanced 1.4 percent to USD 17.240 an ounce, platinum was up 0.8 percent at USD 1,056.20 while palladium rose 0.8 percent to USD 593.97.