Gold spikes above $1,400 per ounce to prices not seen in nearly 6 years

130
0
Share:

Melted gold flows out of a smelter into a mould of a one kilogram bar at a plant of gold refiner and bar manufacturer Argor-Heraeus SA in the southern Swiss town of Mendrisio.

Arnd Wiegmann | Reuters

Gold prices soared for a second day in a row on Friday, touching levels not seen in almost 6 years.

As of 10:35 a.m. HK/SIN, spot gold jumped 1.36% to $1,406.71 per ounce, soaring past the $1,400 level for the first time since August 2013. Gold futures also rose 0.97% to $1,410.50 per ounce.

Gold prices surged a day earlier, after the U.S. Federal Reserve opened the door for a possible rate cut in the future, sending the yield on the benchmark 10-year Treasury note below 2% — a key psychological level — for the first time since November 2016.

The U.S. dollar index, which tracks the greenback against a basket of currencies, also tumbled to 96.565 after touching levels above 97.6 earlier in the week.

“Gold prices have recovered from their lows and we think this rise could be sustainable,” strategists at Singapore’s DBS Group Research wrote in a note. “Rising political tensions, lower bond yields and (a U.S. dollar) on the verge of reversing should make the rest of 2019 very interesting for the metal.”

Also on Thursday, European Central Bank President Mario Draghi said “additional stimulus will required” if the economic situation worsens in the coming months. Bank of Japan Governor Haruhiko Kuroda also indicated on Thursday the central bank would “consider expanding stimulus without hesitation ” — should the economy lose momentum toward achieving the ever elusive 2% inflation target.

Tensions in the Middle East also continue to linger following Iran shooting down a U.S. drone on Thursday.

With central banks loosening monetary policy, and US growth potentially peaking amid elevated geopolitical risks, Analysts at Citi said in a Thursday note that they were updating their longstanding bullish targets for gold.

“We published a 6-12m point-price of $1,400/oz in January and we now roll that forward to a $1,450 0-3m target, contingent on a dovish July FOMC (e.g. 50 bps and further signaling),” they said.

Source: CNBC

Subscribe to Equity Extra

Recieve the Latest Updates on Breakout Stocks

Subscribe to Equity News Report’s ‘Equity Extra’ Alerts list to be the first to learn about Premium Nasdaq Stocks before they Breakout

Share:

Leave a reply