Gold Hovers Near Three-Week High

Gold held close to its highest level in nearly three weeks on Monday, boosted by safe-haven demand after the Federal Reserve's move last week to leave U.S. interest rates unchanged weighed on global equities.
Spot gold eased slightly to $1,137.56 an ounce by 0311 GMT, after gaining 3 percent in the previous three sessions. Trading liquidity is likely to be thin during Asian hours due to a three-day holiday in Japan.


The metal had climbed to $1,141.50 in the previous session, its highest since Sept. 2.

Asian shares followed Wall Street lower on Monday after the Fed's decision to keep interest rates at record lows raised fresh concerns about growth globally, particularly in China. U.S. and European debt yields also tumbled.

"The retreat in equities plus the continued decline in U.S Treasury yields helped encourage buying in gold," said HSBC analyst James Steel.

"Buying appeared to be a combination of safe-haven demand and fresh short covering," he said.

The Fed kept interest rates unchanged last week in a bow to worries about the global economy, financial market volatility and sluggish inflation at home. It left open the possibility of modest rate rises later this year.

With the Fed having sounded a cautious tone on the health of the global economy, the focus this week will likely turn to China and the flash PMI report on Wednesday.

The decision to not hike rates last week is positive for non-interest-paying gold, which could see demand drop with higher rates. Bullion prices have dropped about 4 percent this year on uncertainty over the timing of a rate hike.

But with the Fed expected to hike rates before the end of the year, gold could come under pressure again.

Marketmagnify provide tips and advices to our clients by sms/calls/chat. We have dedicated team of analysts and we are providing reliable and valuable tips on stock, commodities. We believe in our customer satisfaction by giving them successful results.We provide high accurate Mcx Tips at very reasonable price to help small traders and investors to make decent money. Fill OUR FREE TRIAL We cover all types of services all segment.