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Gold Prices Rise Above $1,300 Mark Amid Concerns on Economic Downturn

Investing.com - Gold prices rose above the $1,300 mark on Friday in Asia as a potential downturn in the global economy continued to attract safe-haven demand.

Gold Futures for February delivery gained 0.2% to $1,297.20 at 1:07 AM ET (06:07 GMT) on the Comex exchange. It hit as high as 1,300.04 earlier in the day.

Global stock markets were under pressure this week after China reported weaker-than-expected PMI data. The news that Apple (NASDAQ:AAPL) cut its quarterly sales forecast was also cited as a headwind.

The safe-haven gold, on the other hand, received support following the news.

“This rally in gold is based on investors increasingly realizing that gold is ‘safe money’,” Rainer Michael Preiss, an executive director at Taurus Wealth Advisors Pte, said before prices broke $1,300.

The rally past $1,300 is considered an important psychological hurdle that could spur additional buying, according to analysts including George Gero at RBC Wealth Management. “The market has major worries about the economy, the stock market and political events” including Brexit, said Gero. “If investors keep looking for havens, the price could reach $1,350,” he said.

Meanwhile, the U.S. dollar index that tracks the greenback against a basket of other currencies edged up 0.1% to 95.945.

On Friday, market sentiment recovered somewhat after the Commerce Ministry confirmed in a statement that the U.S. and China would begin another round of trade talks next week. Deputy U.S. Trade Representative Jeffrey Gerrish will lead the U.S. delegation for the negotiations on Jan. 7 and 8.

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