PRECIOUS-Gold rises as global recession fears lift safe-haven appeal

Reuters

Warning: This material has been prepared by a third party company, Reuters, which is independent of Davy. Davy has not reviewed the material and accepts no responsibility for errors or omissions, or for the information or opinions contained therein. It does not constitute investment advice.

    * Silver gains nearly 2%
    * China July industrial output growth weakest in 17 years
    * Germany's economy contracts in the second quarter 

 (Updates prices)
    By Sumita Layek
    Aug 14 (Reuters) - Gold rose over 1% on Wednesday as an
inverted U.S. Treasury yield curve and weak euro zone data
stoked fears of a global economic recession and drove investors
toward safe-haven bullion.
    Spot gold  XAU=  rose 1.1% to $1,517.88 per ounce, as of
2:03 p.m. EDT (1803 GMT), after dipping as much as 2% in the
previous session.
    U.S. gold futures  GCcv1  settled up 0.9% at $1,527.80.
    The U.S. Treasury yield curve  US2US10=TWEB  inverted for
the first time since 2007, when the U.S. subprime mortgage
crisis was gathering pace, in a sign that the world's biggest
economy could be headed for a recession.  US/ 
    "With major economies in the euro zone reporting negative
growth, it's possible we will see a recession. So for gold in
particular, it increases expectations of what the U.S. Federal
Reserve will do in terms of easing" interest rates, said Jeff
Klearman, portfolio manager at GraniteShares.
    "Nothing in the immediate future is working against gold;
there may be bouts where gold retraces, but the trend is
upward."
    The euro zone's GDP barely grew in the second quarter as
economies across the bloc lost steam and the largest, Germany,
contracted due to a global slowdown driven by trade disputes and
uncertainty over Brexit.  urn:newsml:reuters.com:*:nL8N25A2SQ  urn:newsml:reuters.com:*:nL8N25A1D1
    This came after data showed growth in China's industrial
output in July rose at the slowest pace in more than 17 years.
 urn:newsml:reuters.com:*:nB9N24U02P
    The renewed recession risks drove a slump in global stocks.
 MKTS/GLOB 
    "Geopolitics also remains close to the front burner of the
marketplace, which is also supporting gold and silver," Jim
Wyckoff, senior analyst with Kitco Metals, wrote in a note,
adding "the civil unrest in Hong Kong remains in focus among
traders and investors worldwide."  urn:newsml:reuters.com:*:nL4N2595MG
    In a volatile session on Tuesday, gold initially jumped to
an over six-year high of $1,534.31 due to the unrest in Hong
Kong and a slump in Argentina's peso, before reversing to fall
2% on signs of a thaw on the trade front.  urn:newsml:reuters.com:*:nL2N2590HM
    Investors awaited the U.S. Federal Reserve's annual conclave
in Wyoming next week  FEDWATCH  for clues on the future
trajectory of interest rates. 
    SPDR gold trust holdings, meanwhile, saw an outflow of about
11 tonnes - the biggest since early April - on Tuesday from
Monday, when holdings were at the highest in over a year.
    Silver  XAG=  gained 1.7% to $17.25 per ounce, after hitting
its highest since January 2018 on Tuesday. 
    Platinum  XPT=  slipped 0.7% to $845.89 an ounce, while 
palladium  XPD=  dipped 1.7% to $1,430.56.
    While the palladium market is likely to remain in deficit
this year and next, "liquidity has returned and is shaking off
froth," INTL FCStone analyst Rhona O'Connell said in a research
note.

 (Reporting by Sumita Layek in Bengaluru, editing by G Crosse
and Richard Chang)
 ((Sumita.Layek@thomsonreuters.com; +1-651-848-5832, outside
N.America, +91-80-6749-1638; Reuters Messaging:
Sumita.Layek.thomsonreuters.com@reuters.net))

Warning: This content may be provided by regulated and unregulated entities and is not created, reviewed or endorsed by Davy. It is provided for general information purposes only and does not constitute a recommendation or solicitation to purchase or sell any security or make any other type of investment or investment decision. Importantly, it does not constitute investment advice, as it does not contemplate the personal circumstances of any particular person or group of persons. Neither Davy nor the providers of the Third Party Content will be liable for any investment decision made based on the reliance on or use of such data, or any liability that may arise due to delays or interruptions in the delivery of the Third Party Content for any reason.