Investing.com - Gold futures pushed higher in Europe trade on Wednesday, as retreating oil prices, a weaker dollar and losses in global equity markets underpinned demand for assets perceived as safer.
Global stock markets plunged as oil prices fell to fresh 13-year lows, adding to fears over the outlook for global growth. Japan’s Nikkei 225 entered a bear market Wednesday, while Hong Kong stocks hit a three-and-a-half year low.
The downbeat mood spilled over to European equities, where Germany's DAX sank 3%, while London’s FTSE 100 dropped 2.8%. Elsewhere, Wall Street pointed to sharp losses at the open, with the Dow futures down 2.3%, or 360 points.
Gold is often seen as an alternative currency in times of global economic uncertainty and a refuge from financial risk.
Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, shed 0.45% to 98.73.
Gold for February delivery on the Comex division of the New York Mercantile Exchange tacked on $6.70, or 0.62%, to trade at $1,095.80 a troy ounce by 9:00GMT, or 4:00AM ET.
Investors kept an eye on upcoming U.S. data to gauge if the world's largest economy is strong enough to withstand further rate hikes in 2016. The U.S. is to release reports on building permits, housing starts and consumer price inflation at 8:30AM ET Wednesday.
Data on U.S. retail sales, manufacturing activity and industrial production all fell short of market expectations last week, the latest indication that economic growth stalled in the fourth quarter.
The downbeat data could persuade the Federal Reserve to delay its next interest rate beyond the first quarter. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
Also on the Comex, silver futures for March delivery dipped 3.6 cents, or 0.25%, to trade at $14.08 a troy ounce during morning hours in London.
Elsewhere in metals trading, copper declined as worries over global economic growth continued to weigh.
The International Monetary Fund cut its global growth forecasts for the third time in less than a year on Tuesday, citing a sharp slowdown in China , weak commodity prices and rising interest rates in the U.S.
Copper is down nearly 8% so far this year as investors slashed holdings of the red metal amid persistent worries over an economic slowdown in China.
The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.