Gold price was slightly higher on Wednesday’s Asian trade, with investors buying up the safe haven metal amid a gloomy global growth picture as well as the potential for more central bank easing.
The metal found a boost after the International Monetary Fund (IMF) downgraded its global growth forecasts. IMFslashed its 2015 and 2016 global growth forecasts by 0.3 percentage points to 3.5 percent and 3.7 percent respectively, with downgrades across the board apart from the bright spot in US.
Meanwhile, China announced its 4Q14 GDP growth of 7.3 percent which was in line with market expectations and brought the full year growth to 7.4 percent, which was close but slightly below the expected 7.5 percent growth target the Chinese government had set for itself.
With global growth prospects looking lacklustre, investors are expecting more easing policies to come, which adds another reason to buy gold – a preservation of value.
While prices have climbed steadily since the start of the year for both gold, as well as for the outperforming silver, analysts cautioned that prices will need to consolidate before seeing further gains.
“While we do not discount further safe haven inspired gains in gold, the yellow metals may be in need of a price consolidation given its nine percent gain in less than three weeks of trading so far this year. Price rallies of such nature may put a strain, if not discourage, price sensitive emerging market buyers,” said HSBC Securities analyst James Steel.
Spot gold price was last at $1,296.70, up $4.30 from lst price on Tuesday. Silver surged past the $18 mark to last done at $18.04 per ounce, a 12 cents increase from yesterday.
In others, platinum trimmed its gains after hitting a near 3.5 months high of $1,288 on Tuesday. Current prices are at $1,275, a $2 drop overnight. Palladium finally played catch up with the rest in the complex, gaining $10 on Tuesday and a further $2 upside this morning with current prices at $777 per ounce.
The post Gold price continues to eye $1,300 level; precious metals holding steady appeared first on The Bullion Desk.
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