Gold jumped above $ 1,300: investors fear the future
January 04, 2019 @ 11:16 UTC
Gold pierced the $1,300 level to extend a new year rally. Investors flocked to the metal with global equities in retreat, signs of a slowdown stacking up, and the oldest of havens showing its mettle as exchange-traded funds draw in increased flows. Futures spiked as much as 0.4 percent to $1,300.40 an ounce on the Comex, the highest price since June, and were at $1,296.50 at 6:36 a.m. in London. Spot prices were not far behind, hitting as much as $1,298.60. Silver also gained to the highest since July.
Gold has become the go-to commodity in the opening days of 2019 as investors contemplate a deteriorating worldwide outlook and factor in fewer, if any, Federal Reserve interest rate hikes this year. On Thursday, a gauge of U.S. manufacturing sank by the most since the 2008 recession a day after Apple Inc. cut its revenue outlook, fueling concern that the trade war with China is taking a bigger-than-expected toll on growth. The partial U.S. government shutdown has also spurred a risk-off mood.
The rally past $1,300 is considered an important psychological hurdle that could spur additional buying, according to analysts including George Gero at RBC Wealth Management. “The market has major worries about the economy, the stock market and political events” including Brexit, said Gero. “If investors keep looking for havens, the price could reach $1,350,” he said.
Gold Bursts Above $1,300 as Slowdown Tremors Spur New Year Rally, Bloomberg, Jan 04