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Gold Prices Rise to 1-Month Highs as Global Growth Worries Spur Safe-Haven Demand

Investing.com - Gold prices rose to a one-month high on Monday as lingering concerns over the outlook for the global economy increased demand for the safe-haven precious metal, despite positive data out of Germany and some relief that the investigation into alleged collusion in the 2016 election campaign ended without charges against U.S. President Donald Trump.

At 11:27 AM ET (15:27 GMT), gold futures for April delivery on the Comex division of the New York Mercantile Exchange rose $8.95, or 0.68%, to $1,327.65 a troy ounce, its best level since Feb. 28.

Risk-off sentiment that caused the worst day in the S&P 500 so far this year on Friday applied further pressure at the beginning of this week, benefiting gold as a safe-haven option.

The inversion of the bond yield curve in the U.S. on Friday saw investors flock from riskier assets such as stocks in a flight to gold.

Gold, which has benefited from continues worries over the global economy, particularly in China and Europe, is up more than 10% since it hit lows last August.

The inversion of the yields in bonds, often seen as a leading indicator of recession, drove those worries further even as the U.S. and China are immersed in an ongoing trade dispute that puts the global economy at risk.

Chicago Federal Reserve Bank President Charles Evans also downplayed the yield curve inversion, given his confidence in the U.S. economic outlook.

“Some of this is structural, having to do with lower trend growth, lower real interest rates,” he said Monday at the Credit Suisse Asian Investment Conference in Hong Kong. “I think, in that environment, it's probably more natural that yield curves are somewhat flatter than they have been historically.”

Former Fed Chairwoman Janet Yellen also said on Monday that the yield curve may signal the need to cut interest rates at some point, but it does not signal a recession.

Unable to shake the general feeling of economic woe, German data had provided positive signs on Monday as business confidence in the euro zone’s largest economy rebounded more than expected, posting its first improvement after six months of declines.

With a thin U.S. economic calendar on Monday, the focus this week will be on the final reading of fourth-quarter growth along with data on personal consumption expenditures (PCE) inflation, the Federal Reserve's preferred metric for inflation.

Also serving to keep outright panic at bay, Special Counsel Robert Mueller found no evidence of collusion between Trump's campaign team and Russia, and did not present enough evidence to warrant charging the president with obstruction of justice, U.S. Attorney General William Barr said on Sunday.

The end to the investigation that Trump always referred to as a “witch hunt” not only could serve as a potential tool for his reelection campaign, but removes what some see as a distraction from pressing economic questions such as infrastructure spending or trade relations with China.

A U.S. trade delegation, headed by Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing this week to meet with Chinese Vice-Premier Liu He for further talks aimed at resolving the trade conflict between the world’s two largest economies.

In other metals trading, silver futures rose 1.07% at $15.572 a troy ounce by 11:29 AM ET (15:29 GMT).

Palladium futures advanced 1.50% to $1,538.30 an ounce, while sister metal platinum traded up 1.03% at $862.20.

In base metals, copper rose 0.55% to $2.858 a pound.

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