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PRECIOUS-Gold jumps 1% to over 6-year high on Hong Kong, Argentina woes

Tue, 13th Aug 2019 11:01

* SPDR Gold holdings up 0.9% on Monday

* Silver touches more than 1-1/2 year high

* U.S. 30-year bond yields slip to lowest since July 2016

* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl(Updates prices)

By K. Sathya Narayanan

Aug 13 (Reuters) - Gold hit a more than six-year high onTuesday as unrest in Hong Kong and a rout in the Argentine pesodrove investors already spooked by the U.S.-China trade war intohavens such as bullion at the expense of riskier assets such asstocks.

Spot gold was up 1% at $1,525.99 per ounce as of 1123GMT, off a day high of $1,534.31 - its highest level since April2013.

U.S. gold futures was up 1.3% to $1,537 an ounce.

"Bond yields and equities are down which are the main reasonfor gold to be higher. There is a bit of safe-haven (interest),"ABN Amro analyst Georgette Boele said. "People are nervous aboutHong Kong again, and that's why Asian markets were down."

Share markets slid for a third day on Tuesday as investorswere spooked by fears of a drawn-out global trade war, the HongKong protests and a crash in the peso.

In Hong Kong, pro-democracy protesters on Monday managed toshut down the city's airport, the world's busiest air cargo hub.

Elsewhere, Argentina's peso collapsed on Monday,losing roughly 15% of its value against dollar after crumblingto an all-time low.

Fears of a possible return to interventionist policies ofthe previous government have gripped the Argentine market sincemarket-friendly President Mauricio Macri lost a primary electionby a bigger-than-expected margin.

Bullion, along with the Japanese yen and U.S. Treasuries, isseen as a relatively safe investment in times of political andfinancial uncertainty.

The yen rose to a seven-month high against the dollarin the previous session, while U.S. 30-year bond yieldsextended Monday's losses to slip to their lowestsince July 2016.

Analysts said negative debt yields around the globe werefurther supporting bullion. Non-interest bearing gold tends tobenefit when yields on other assets are low.

Market focus is now on the U.S. Federal Reserve's annualsymposium next week for clues on the future trajectory ofinterest rates. Traders see a 69% chance of a 25 basis-pointrate cut by the U.S. central bank this September.

On the technical front, "a solid breakout and daily closeabove the $1525 level is likely to inject gold bulls with enoughinspiration to challenge $1,550," FXTM analyst Lukman Otunugasaid in a note.

Holdings in the world's largest gold-backed exchange-tradedfund, SPDR Gold Trust, jumped 0.9% to 847.77 tonnes onMonday.

Among other precious metals, silver climbed 2% to$17.40 per ounce, having touched its highest since January 2018.Platinum rose 1.4% to $864.77, while palladiumgained 0.5% to $1,434.68 an ounce.

(Reporting by K. Sathya Narayanan in Bengaluru; editing by JanHarvey and Jason Neely)

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