Gold Prices Gain In Asia As Safe Haven Demand Grows on Stocks Rout

Investing.com – Gold prices gained in Asia on Tuesday as safe-have demand for the precious metal came to the fore following a rout in US stocks that carried over into the region and sent Tokyo down as much as 5%,

for February delivery on the Comex division of the New York Mercantile Exchange rose 0.88% to $1,348.80 a troy ounce. The closed lower at 24345.68. The closed 4.10% lower, while the closed at 6967.53, down 3.78%. The Dow Jones tumbled as much as 1,600 points to its lowest since Nov. 28.

225 was down as much ass 5% and the fell nearly 4%.

Overnight, gold prices remained under pressure as the dollar moved off lows after services data topped economists’ forecasts reaffirming investor expectation that bullish economic growth would strengthen the Federal Reserve’s case to raise rates more aggressively.

ISM non-manufacturing data for January showed an uptick to 59.9, beating expectations of 56.5.

Scotia bank said that upbeat ISM non-manufacturing data was a “strong plus for growth and the components are hawkish to the Federal Open Market Committee.”

In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to interest-bearing assets such as bonds.

Gold suffered its biggest weekly loss since December last week as data showed traders appear wary of increasing their bullish bets on gold.

Speculative net long position in gold fell by about 7,000 contracts to a net long 207,300 contracts, according to the most recent Commitment of Traders (COT) report. It was the first decline in net long positions in four weeks.

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