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Gold rises as investors rush to safer assets
Gold edged higher on Tuesday on safe haven plays as equity markets fell again. Markets began to be concerned that the U.S. Federal Reserve will not raise interest rates at its policy meeting later this month.
Fed Vice Chairman Stanley Fischer said on Saturday that U.S. inflation will likely rebound as pressure from the dollar fades, allowing the U.S. central bank to raise interest rates gradually.
Spot gold was up 0.5 percent at $1,139.60 an ounce by 0153 GMT, after an uneventful session on Monday.
China also gave concern to investors after an official gauge of manufacturing activity in August slumped to a three-year low while the usually strong services sector showed new weakness. The official manufacturing PMI fell to 49.7 in August from 50 a month ago, falling short of market forecasts of 49.8. A reading above 50 indicates an expansion in manufacturing activity compared with the previous month, while a reading below points to a contraction.
The government’s nonmanufacturing PMI, also released on Tuesday, fell to 53.4 from 53.9 in July, showing expansion but at a slower pace.
Meanwhile, private gauges of both manufacturing and services activity also showed a similar pattern of less-than-stellar activity despite government efforts to bolster the economy.
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