Gold held steady near a two-week high yesterday as world equities retreated after the International Monetary Fund (IMF) cut its global growth outlook ahead of the release of minutes from the US Federal Reserve’s March meeting.
Spot gold was unchanged at $1 303,73 an ounce at 1145 GMT, having touched its highest since March 28 on Tuesday at $1 306,09. US gold futures were flat at $1 307,80.
“It (gold) seems to be very much stuck at the moment . . . part of the issue is most of the developments haven’t really been much of a surprise to the market,” said Capital Economics analyst Ross Strachan, adding that the growth downgrade by the IMF was also widely anticipated.
Gold was also supported by central bank purchases and a significant move lower in US equity markets will boost prices, Strachan said.
The IMF had said on Tuesday that the global economy is slowing more than expected and a sharp downturn could require world leaders to coordinate stimulus measures.
Central banks around the world were increasing their gold stockpiles, with China raising its reserves for a fourth straight month in March.
Gold is widely viewed as a safe investment during times of political and economic uncertainty.
A recent rally in global shares stalled as US President Donald Trump threatened more tariffs against the European Union, though the prospect of stimulus measures from the European Central Bank (ECB) kept them from falling too far.
“The dollar is not doing too much at the moment . . . that has sort of reduced volatility in gold prices in the short term. But the longer term outlook is fairly constructive for gold,” said ING analyst Warren Patterson.