(Reuters) - Gold rose to its highest in more than a week on Tuesday as the dollar and equities weakened after the International Monetary Fund cut its global economic growth forecasts for the year, with increased buying by central banks lending further support.
Spot gold rose 0.5 percent to $1,303.98 per ounce as of 1:36 p.m. EDT (1736 GMT), having hit its highest since March 28 at $1,306.09. U.S. gold futures settled 0.5 percent higher at $1,308.3.
“The main reason is the fact that the IMF downgraded global economic growth from 3.5 down to 3.3 percent; that coupled with news over the weekend that China was upping their gold stockpiles has gold trading higher at the moment,” said Bob Haberkorn, senior market strategist at RJO Futures.
“It’s (IMF forecast) got little jitters out there in the markets, some flight to safety buying just based on that. We’ll see a move back to $1,325 over the next two weeks or so.”
The IMF cut its global growth forecasts for 2019 and warned growth could slow further if trade tensions persist and if Britain makes a disorderly exit from the European Union.
China, the world’s biggest gold consumer, raised its gold reserves for a fourth straight month in March; Turkey also increased holdings.
The dollar index fell to its lowest in more than a week, while Wall Street’s main indexes fell.
Weak U.S. data boosted demand for bullion. Job openings fell in February and there was a dip in new orders for U.S.-made goods. Last week’s non-farm payrolls data signaled a slowdown in wage growth.
“With some questionable data here in the U.S. and abroad, there would be a stronger need for safe-haven assets and gold would certainly lead that charge,” said David Meger, director of metals trading at High Ridge Futures.
“In the short term, we believe gold is continuing its slow grind sideways to higher.”
Investors are awaiting minutes of the U.S. Federal Reserve’s March meeting, due on Wednesday.
Upward momentum in bullion was yet to reflect on the investment side, with holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, falling for a sixth straight session on Monday.
Among other precious metals, spot platinum slipped 1.5 percent to $891.75 per ounce. The metal had touched its highest since May 2018 in the previous session.
Palladium was up 0.2 percent at $1,386.01 per ounce, while silver dropped 0.1 percent to $15.23.
Reporting by Sumita Layek in Bengaluru; Editing by Marguerita Choy and David Gregorio