Gold holds up

Kuwait Times - - BUSINESS -

LON­DON:

Gold rose yes­ter­day, notch­ing up to its sec­ond week of gains af­ter shrug­ging off slightly bet­ter-than-ex­pected U.S. third-quar­ter GDP data amid firm demand from Asia. Spot gold was up 0.3 per­cent to $1,271.90 an ounce at 1445 GMT and is up 0.5 per­cent this week. US gold fu­tures slipped 0.2 per­cent to $1,267.10. The US econ­omy grew by 2.9 per­cent in the third quar­ter, out­pac­ing an­a­lysts’ con­sen­sus fore­cast of 2.5 per­cent, strength­en­ing the case for an in­ter­est rate in­crease and mak­ing non-yield­ing as­sets such as gold less at­trac­tive while boost­ing the dol­lar and US trea­suries.

The read­ing of the world’s big­gest econ­omy dragged gold to a ses­sion low of $1,262.04 but the price re­bounded shortly af­ter. “The GDP data was not over­whelm­ingly strong, the rise was mar­ginal and the con­tri­bu­tion to un­der­ly­ing strength wasn’t very strong,” said Carsten Fritsch, com­mod­ity an­a­lyst at Com­merzbank. “The fact that we have strong phys­i­cal demand prob­a­bly puts a floor to the price.”

Demand for bul­lion in In­dia is ex­pected to pick up dur­ing the Dhanteras and Di­wali fes­ti­vals, when gold is tra­di­tion­ally given as a gift. The dol­lar in­dex, which mea­sures the green­back against a bas­ket of cur­ren­cies, strength­ened briefly fol­low­ing the US data but then drifted 0.25 per­cent lower to 98.618. US in­ter­est rate fu­tures are im­ply­ing a near 80 per­cent chance of the US Fed­eral Re­serve rais­ing rates by De­cem­ber, ac­cord­ing to the CME Group’s FedWatch tool.

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