Gold inches higher as Asian stocks slip

Monday,   22-Oct-2018   10:42 AM (IST)

Gold prices edged higher early Monday, moving closer to a 2-1/2-month peak hit last week, as Asian shares fell amid rising political tensions and worries over slowing global economic growth.Spot gold was up 0.1 per cent at $1,227.56 an ounce. On Oct. 15, the bullion touched its highest since July 26 at $1,233.26. US gold futures were up 0.2 per cent at $1,230.60 an ounce.Asian share markets fell anew on Monday as investors braced for the peak of the US earnings season while angst over Saudi Arabia, Italy and Brexit kept geopolitics front and centre. Saudi Arabia on Sunday called the killing of journalist Jamal Khashoggi at its Istanbul consulate a "huge and grave mistake," but sought to shield its powerful crown prince from the widening crisis, saying Mohammed bin Salman had not been aware.President Donald Trump said Washington would withdraw from a landmark Cold War-era treaty that eliminated nuclear missiles from Europe because Russia was violating the pact, triggering a warning of retaliatory measures from Moscow.The Italian government expects the European Commission to decide for the first time ever on Tuesday to ask a member state to revise its draft budget, a government source said on Sunday. Prime Minister Theresa May will tell parliament on Monday that 95 per cent of Britain's divorce deal has now been settled but will repeat her opposition to the European Union's proposal for the land border with Northern Ireland. The outlook for global growth in 2019 has dimmed for the first time, according to Reuters polls of economists who said the US-China trade war and tightening financial conditions would trigger the next downturn. Disputes over US tariffs and retaliatory moves by other states have sparked 12 requests for adjudication at the World Trade Organization, signalling an escalation in global trade tensions. Another two to three interest rate increases from the Federal Reserve will likely put US borrowing costs in "neutral" territory where it is neither stimulating nor restricting economic growth, Dallas Federal Reserve President Robert Kaplan said on Friday. Russia's gold reserves stood at 65.5 million troy ounces as of the beginning of October, the central bank said on Friday. A key festival brought little activity to the physical gold market in India last week as purchases remained significantly lower than normal.Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.39 per cent to 745.82 tonnes on Friday. Gold speculators cut their net short position in COMEX gold contracts by 65,637 contracts to 37,372 contracts, the smallest since late July, in the week to Oct. 16, data showed.