S&P 500 flirts with fresh record high, but chip-led softness weighs
* Spot gold could fall to $1,488/oz -technicals
* SPDR Gold holdings rose 1.8% on Wednesday
* Dollar firms near three-week peak
(Updates prices)
By Brijesh Patel
Sept 26 (Reuters) - Gold prices rose on Thursday after a
nearly 2% slide in the previous session triggered buying
interest for the safe-haven metal, although a strengthening U.S.
dollar capped gains.
Spot gold XAU= was up 0.3% at $1,507.87 an ounce as of
1:41 p.m. EDT (1741 GMT), while U.S. gold futures GCcv1
settled up 0.2% at $1,515.20.
"We are seeing increasing volumes in the exchange-traded
funds (ETF) to position gold on yesterday's sell-off. This goes
to show that these dips are being bought by investors," said
Daniel Ghali, commodity strategist at TD Securities.
Reflecting investors' sentiment in gold, holdings of SPDR
Gold Trust GLD , the world's largest gold-backed ETF, jumped to
924.94 tonnes on Wednesday, up 1.8% from the previous day.
However, denting gold's appeal, the dollar .DXY firmed
near a three-week peak after political uncertainties in the
United States stemming from an impeachment inquiry into
President Donald Trump drove investors to the safety of the
greenback. USD/
A U.S. House Intelligence Committee on Thursday released a
declassified version of a whistleblower report alleging that
Trump used his office to solicit interference in the 2020
presidential election from a foreign country. The fresh developments surrounding Trump's July 25 Ukraine
call sent U.S. stock indexes and Treasury yields lower,
offseting positive trade signals from China. Earlier in the day, Beijing said it was in close
communication with the United States and was preparing to make
progress with their trade talks in October. "The weakening global economic data and political risks
should keep stimulus strong from the U.S. Federal Reserve,
European Central Bank and People's Bank of China," Edward Moya,
a senior market analyst at OANDA, said in a note.
"Once this consolidation period ends, we could see gold
target the $1,600 level."
U.S. business investment contracted more sharply than
previously estimated in the second quarter and corporate profit
growth was tepid, casting a shadow on an economy that is being
stalked by financial market fears of a recession. "We continue to be in the opinion that global growth signals
are still weakening and the question is will that sap into the
United States and prompt the Fed to cut rates more aggressive
than the market currently anticipating," TD Securities' Ghali
said.
Gold tends to appreciate on expectations of lower interest
rates, which reduce the opportunity cost of holding non-yielding
bullion.
On the technical front, spot gold is likely to fall to
$1,488 an ounce after breaking support at $1,514, said Reuters
technical analyst Wang Tao. Elsewhere, silver XAG= slipped 0.2% to $17.87 an ounce,
platinum XPT= was up 1.1% at $935.23 and palladium XPD=
climbed 1.7% to $1,670.54.
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