Gold rallies as equities plunge amid recession fears

0 Comment(s)Print E-mail Xinhua, August 15, 2019
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CHICAGO, Aug. 14 (Xinhua) -- Gold futures on the COMEX division of the New York Mercantile Exchange settled higher on Wednesday, as New York stock benchmarks slid sharply amid rising concerns over possible global recession.

The most active gold contract for December went up 13.70 U.S. dollars, or 0.9 percent, to close at 1,527.80 dollars per ounce.

The key U.S. stock benchmark indexes slipped over 2 percent as investors dumped risky stocks for safe haven assets, such as gold.

The Dow Jones Industrial Average plunged more than 700 points. The S&P 500 and Nasdaq Composite Index followed Dow's plunge, as latest economic data from key economies fueled anxieties among investors over world growth slowdown and even recession.

Germany, the economic engine in the European Union, has just announced that its gross domestic product contracted 0.1 percent in the second quarter of 2019.

Many analysts contributed the growth downturn in Germany to trade tensions between world's leading economies, as German economy relies heavily on exports.

Also on Wednesday, U.S. 10-year Treasury yield plunged to about 1.60 percent, and slid even below the 2-year bonds' rate at some point, signaling a weak U.S. growth in the near future in the eyes of bond investors.

The pessimistic outlook on world economy among market participants boosted demand for gold.

Yet a stronger U.S. dollar curbed the rise of gold. The U.S. dollar index, a gauge of the greenback against a basket of other major currencies, rose 0.12 percent to 97.93 ahead of the gold's settlement.

As for other precious metals, September silver went up 29.5 cents, or 1.74 to close at 17.28 dollars per ounce. The October platinum fell 11.70 dollars, or 1.36 percent, to settle at 848.00 dollars per ounce. Enditem

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