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PRECIOUS-Gold creeps higher on falling yields, global growth worries

Published 28/03/2019, 12:27 am
© Reuters.  PRECIOUS-Gold creeps higher on falling yields, global growth worries
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* Gold saw worst one-day pct fall in nearly 2 weeks on Tues

* Market eyes Brexit vote at 1900 GMT

* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl (Updates prices)

By Sumita Layek

March 27 (Reuters) - Gold prices edged up on Wednesday as weak stock markets and falling bond yields reflected worries about a global economic slowdown and lifted safe-haven assets.

Spot gold XAU= was up 0.1 percent at $1,316.61 per ounce as of 1323 GMT, after falling about 0.5 percent on Tuesday. U.S. gold futures GCv1 were also up 0.1 percent, at $1,315.5 an ounce.

Concerns that the global economy will slow pushed bond yields lower, providing support for gold.

"The falling yields are reducing the opportunity cost of holding the bullion, which is supportive for gold prices," said Quantitative Commodity Research analyst Peter Fertig.

The 10-year U.S. Treasury yield fell further US10YT=RR , having fallen below the yield for three-month bills US3MT=RR on Friday for the first time since 2007, inverting the yield curve. An inversion is widely seen as indicating an economic recession. US/

Global equity markets nudged down on Wednesday as investors hoped central bank action in the world's biggest economies could temper some of the slowdown in global growth. MKTS/GLOB

However, a stronger U.S. dollar .DXY was acting as a headwind to gold, analysts said. The index was up 0.1 percent and hit its highest in two weeks earlier in the session.

Facing rising threats to growth, the European Central Bank could further delay a planned increase in interest rates if it needs to and may look at measures to mitigate the effects of negative interest rates, ECB President Mario Draghi said on Wednesday.

In the latest economic data from the United States, homebuilding fell more than expected in February, while consumer confidence ebbed in March, offering more evidence of a sharp slowdown in economic activity early in the year. clearly is a slowdown in the global economy and if we start seeing more signs of a potential recession, that should be even more constructive for gold," said ING analyst Warren Patterson.

Gold has gained more than 13 percent since touching more than 1-1/2-year lows last August, on the back of a dovish U.S. Federal Reserve and global growth concerns.

Market participants are now keeping a close eye on the British parliament's vote on Brexit plans scheduled at 1900 GMT.

British Prime Minister Theresa May is expected to indicate a date for quitting her post as the price for getting her twice-defeated Brexit deal ratified, while parliament tries to select its own alternative from a multiple-choice list of options. of investor sentiment, holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust GLD , rose 0.41 percent to 784.26 tonnes on Tuesday.

Among other precious metals, palladium XPD= was down 1.4 percent at $1,517.95 per ounce.

Silver XAG= was down 0.5 percent at $15.35 an ounce, while platinum XPT= was up 1.3 percent at $866.25.

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