Gold Prices Up On Investor Jitters 

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Gold prices are trading higher on investor jitters, as lower oil prices and falling equity markets increase the appeal of this haven asset.

Spot gold is up 0.55% at $1,236.77 a troy ounce in morning European trade.

“It’s all about the stock markets, oil markets, China,” said David Govett, head of precious metals at Marex Spectron in London. “Gold is purely reacting to negative feeling in the other markets.”

The Stoxx Europe 600 index was down 2.12% late on Wednesday morning, and markets in Japan, Australia and Hong Kong all closed lower. That came as sinking commodity prices and lower bank shares continued to weigh down on wider markets.

“Increased risk aversion among market participants again has helped gold to increase temporarily,” Commerzbank said in a research note.

Gold prices have benefited from tumultuous markets this year as investors have piled into the metal on the back of safe haven demand. Gold is up 16.5% in London since the start of the year, outperforming almost all other major asset classes.

Still, most analysts are skeptical that gold can keep up these gains.

“To me this is only a sustainable market as long as everything else stays bearish,” said Mr. Govett.

Analysts point out that actual demand from investors who want to hold the metal, rather than just use it to hedge against market volatility, has not been strong.

Physical demand for gold in India, for instance, has been limited by the recent rise in its price, according to Commerzbank. The country is the second-largest consumer of gold after China.

Source: WSJ

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