Gold seen nearing $1,500 as dollar sags
Gold seen nearing $1,500 as dollar sags by Siddesh Suresh Mayenkar for Gulf News
After years of underperformance, gold prices saw historic breakout of $1,350 in June
Dubai: The gold bulls seem to have woken from their slumber.
After years of underperformance, gold prices witnessed a historic breakout of $1,350 an ounce in June, breaking away from a six-year-long range of $1,200-$1,300.
Gold prices last week hit a six-year high of $1,454.40 last week, registering gains of 11 per cent in the year so far from January 1.
Gold prices have benefited from the continuing trade war between the United States and China, along with concerns over the health of the US economy.
“Gold is benefiting from the decline in the greenback’s value but there are other supporting catalysts driving investors towards the safe haven instrument” Konstantinos Anthis, Head of Research at ADSS said.
“There are $13 trillion in bonds out there that are offering negative yield to investors looking for protection amid a global slowdown — and a potential hedge against inflation from the upcoming central bank easing — so Gold’s zero-yielding nature appears rather appealing at this stage,” he added.
“This means that the rally doesn’t seem over at all and further dollar weakness and signs of incoming inflation could propel prices to $1,470-90 in the near term,” he said.
Global equities are expected to remain weak as analysts scale back expectations of a large US interest rate cut.
On Friday, the Dow Jones Industrial Average closed 0.25 per cent lower at 27,154.20. The S&P 500 index ended 0.62 per cent lower at 2,976.61. The US indices had hit a peak the week before, due to a dovish stance from the Federal Reserve.