(Corrects third paragraph in Sept 4 story to say U.S. gold
futures settled up, not down, 0.3% at $1,560.40)
* Silver scales three-year peak
* SPDR Gold Trust (P:GLD) holdings at highest level since November
By Asha Sistla
Sept 4 (Reuters) - Gold on Wednesday jumped to a fresh
six-year high as focus returned to economic woes with 10-year
U.S. Treasury yields slumping to a three-year low.
Spot gold XAU= was up 0.6% at $1,556.40 per ounce at 1:52
p.m. EDT (1752 GMT), touching a new high since April 2013.
U.S. gold futures GCcv1 settled up 0.3% at $1,560.40.
"Gold can move a bit higher, a big driving macro force is
the decline in global yields, which seems to be spreading," said
Edward Meir, analyst at INTL FCStone.
"When you have gold, at least you can get your money back if
prices are unchanged. If you buy sovereign bonds, you won't get
your money back."
U.S. Treasury yields fell as the benchmark 10-year yield hit
its lowest level since July 2016, after U.S. manufacturing data
showed the first contraction since 2016 on worries about a
weakening global economy and U.S.-China trade tensions. US/
U.S. President Donald Trump threatened on Tuesday that he
would be "tougher" on Beijing in a second term as president if
talks dragged on. However, global stock markets gained after a parliamentary
vote raised chances of another delay to Brexit while a political
gridlock in Italy seemed to have eased. MKTS/GLOB Investors also kept a close watch on developments in Hong
Kong, after the region's leader, Carrie Lam, withdrew a
controversial extradition bill that had triggered months of
violent protests in the Asian financial hub. However, some
lawmakers said it still remains uncertain if this action would
help end the protests. Meanwhile, traders fully priced in a 25 basis-point interest
rate cut at the U.S. Federal Reserve's meeting later this month,
according to CME's FedWatch tool. FEDWATCH
Lower interest rates reduce the opportunity cost of holding
non-yielding bullion and weigh on the dollar. The dollar .DXY
fell against a basket of currencies. USD/
Indicative of sentiment, holdings of SPDR Gold Trust GLD ,
the world's largest gold-backed exchange-traded fund, rose to
890.04 tonnes on Tuesday, their highest level since November
2016. Spot silver XAG= rose 1.4% to $19.50 per ounce, after
hitting $19.57 earlier, its highest level since September 2016.
"It (silver) has climbed further to a three-year high of
$19.6 per troy ounce this morning, bringing the psychologically
important $20 mark into reach. Silver is continuing to
outperform gold – the gold/silver ratio has dropped below 80 for
the first time in over a year," Commerzbank (DE:CBKG) analysts wrote in a
note.
Elsewhere, spot platinum XPT= rose 2.5% to $982.00 per
ounce after jumping 3% to $986 earlier in the session, its
highest price since February 2018. Palladium XPD= was up 0.9%
at $1,556.25.