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Gold Advances in $1,500 Zone as India Demand Enters Fray


By Barani Krishnan

Investing.com – Indian festive buying, hopes of another Federal Reserve rate cut, the U.S.-Sino trade war and the Turkish military invasion in Syria are keeping gold at the $1,500 level that’s key to longs in the market.

for December delivery settled up $8.90, or 0.6%, at $1,512.80 per ounce.

, reflective of trades in bullion, was up $1.80, or 0.2%, at $1,507.42 by 2:55 PM ET (18:55 GMT).

Physical demand for gold had kicked into high gear in India with October’s two key festivals — the Dussehra, which ended Tuesday, and Diwali, which falls on Oct 27. Buying gold is considered auspicious on both occasions.

“Gold will likely garner support from these Indian festivals,” said Eli Tesfaye, senior market strategist for commodities at RJO Futures in Chicago. “There’s a potential rate cut in the Fed’s next policy decision and the U.S.-China trade war is clearly weighing on the U.S. economy as well.”

In minutes of its September meeting published on Wednesday, the Fed said market participants may be anticipating more rate cuts than the central bank deemed necessary to stimulate the economy. So far this year, the Fed has conducted two quarter-point rate cuts back to back in July and September, to try and preserve the U.S. economy’s record decade-long growth.

Despite the Fed’s attempts to temper the market’s anticipation, gold continued to rise on Wednesday on hopes for a third-straight quarter-point cut.

On the trade war front, Chinese delegates have signaled thin hopes for progress as the Trump administration launched into a new series of diplomatic offensives against Beijing, even before high-level negotiations to set resume over the next two days since talks stalled in May.

Gold also rose early in the day on news that Turkey launched an invasion of northern Syria in pursuit of Kurdish militias that it suspects of helping separatists within Turkey. The operation began with massed air raids, including against civilian targets, according to a spokesman of the Kurdish-led Syrian Defense Force, quoted by MCNBC

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Source: Investing.com