Asian shares near 2016 peak * Palladium marks best since November 2015 * SPDR gold holdings post biggest one-day fall in 2016 on Tuesday (Recasts, updates prices) By Vijaykumar Vedala and Sethuraman N R BENGALURU, July 13 (Reuters) – Gold rose marginally on Wednesday, recovering from selling pressure in early trade that pushed bullion to a near two-week low, with investors using the opportunity to hunt for bargains even as improved risk appetite helped global equities rally.
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The recent rally in USA equities SPX, +0.00% DJIA, +0.10% had tarnished the appeal of precious metals, often used as a hedge against higher-risk investments. Prices finished Monday at $20.304, the highest since August 2014, according to FactSet.
Today, Silver is trading at the low end of its usual ratio to Gold and 60% below its Y 2011 high of $49 oz, signaling a shiny future long term. Silver, meanwhile, gained 0.7 percent to $20.27.
Officials at the Federal Reserve also recently indicated they’re still cautious on raising interest rates despite better-than-expected jobs data.
Silver futures turned sharply lower Tuesday, coughing up what would have been a almost two-year settlement high as a record rally in USA equities helped to boring the appeal of precious metals, including gold. But that has been ahead of the US market opening and it is the USA market that has led the downwards trend over the past couple of days. “With the BOE and the BOJ likely to implement further easing measures in due course, we expect gold to remain well bid”.
The US dollar, in which gold is priced, fell 0.2 per cent against a basket of six currencies.
Taiwan’s President Tsai Ing-wen says an worldwide court’s ruling over the South China Sea dispute has damaged the island’s rights to the Spratly Islands. Since precious metals are traded 24 hours a day in markets throughout the world, the price is continually being updated.
Since the beginning of this year, GLD has added gold at a remarkable rate and up until a couple of days ago had brought around 340 tonnes back into its vaults.
iShares Gold Trust (ETF) (NYSE: IAU): Up over 4 percent.
That was because investors were moving to Silver for its safe haven qualities, treating it like a more secure version of paper money, not as an industrial metal.
It points to the Permanent Court of Arbitration in The Hague’s dismissal of China’s claims in the South China and the banking crisis in Italy as just two that are barely featuring yet.
“Silver’s dual usage as a precious metal and industrial material means it tends to benefit from both “risk on” and “risk off” trades, so long as the dollar is also not in demand”, said Fawad Razaqzada, technical analyst at Forex.com.
Platinum, which fell for the first time in two weeks in the previous session, rose 0.5 per cent to $1,091 an ounce, while palladium was up 1.1 per cent at $631.22. Copper bucked the trend as copper contracts for September delivery slumped 0.04% to $2.236 a pound.
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“The market’s thinking China’s going to get more stimulus”, Melek said, noting that auto sales in China went up in June. Read the Asia Markets column.
