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Gold Futures Settle Higher For 2nd Straight Day

Gold prices edged higher on Wednesday, as the dollar slipped against most major currencies and global equity markets drifted lower amid mounting concerns about economic growth.

The lowering of global economic growth forecast by the International Monetary Fund and weak economic data from China and the eurozone have prompted investors to seek the safe haven yellow metal.

The dollar edged lower against a basket of major currencies after the U.S. President Donald Trump criticized the Federal Reserve once again, saying he believes the central bank was moving too quickly with the rate hikes.

Trump also repeated a threat to impose tariffs on $267 billion worth of additional Chinese imports if Beijing retaliates for the recent levies and other measures.

The dollar index eased by 0.26 points, or 0.27%, to 95.10, after having advanced to 95.47 earlier.

Gold futures for December ended up $1.90, or 0.2%, at $1,193.40 an ounce. On Tuesday, gold futures for December ended up $2.90, or 0.2%, at $1,191.50 an ounce.

Silver futures for December settled at $14.326 an ounce, losing $0.074 for the session.

Copper futures for December declined $0.0260, to settle at $2.7805 per pound.

In its latest World Economic Outlook, the IMF forecast 3.7% growth for the world economy for this year and next, lower than the 3.9% growth predicted in the April report and in a July update. "Downside risks to global growth have risen in the past six months and the potential for upside surprises has receded," the global lender said in the report.

The IMF cautioned that an intensification of trade tensions, and the associated rise in policy uncertainty, could dent business and financial market sentiment, trigger financial market volatility, and slow investment and trade.

The US growth forecast for this year was retained at 2.4%, while the projection for next year was trimmed to 2.1% from 2.2% seen in July, citing the recently enacted trade tariffs. The IMF lowered its forecast for Chinese economic growth in 2019 to 6.2% from 6.4%, citing "negative effect of recent tariff actions."

In economic releases today, a report from Insee showed France's industrial production grew at the slowest pace in three months in August, climbing just 0.3% from July. Production had increased 0.8% in July.

The UK economy stagnated in August as the increase in industrial production was offset by a contraction in construction and farm sectors, the Office for National Statistics reported Wednesday. Gross domestic product remained unchanged after expanding 0.4% in July. GDP was forecast to climb 0.2%.

The UK's merchandise trade deficit widened in August from the previous month and was bigger than economists expected, preliminary data from the Office for National Statistics showed.

In the U.S., data from Labor Department showed producer prices rose in line with economist estimates in the month of September. The Labor Department said its producer price index for final demand increased by 0.2% in September
after edging down by 0.1% in August.

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