Gold Surges Through $1,400 on Dovish Central Banks, Weak Dollar
Gold topped $1,400 an ounce for the first time since 2013, riding bullish momentum from central banks’ dovish shift, as well as a drop in the dollar and rising geopolitical tensions.
Bullion for immediate delivery advanced as much as 1.7% to $1,411.63 an ounce, the highest since September 2013, and traded at $1,405.74 by 12:16 p.m. in Singapore. Futures in New York climbed as much as 1.3% to $1,415.40, also the highest since September 2013. The dollar fell to a three-month low.
The metal is heading for its best week in three years as the Federal Reserve opened the door for U.S. interest rates cuts, sinking the greenback, while central banks in Europe and Australia also signaled readiness to do more to support growth. Demand for a haven has also been bolstered by increased tensions between the U.S. and Iran following the downing of an American drone. Investors are set to turn their attention to the meeting between President Donald Trump and Chinese President Xi Jinping during the Group of 20 summit in Japan next week.
“Given the recent dovish shift by central banks, we see interest in gold as likely to rise further over the next couple of years,” said Wayne Gordon, Singapore-based executive director for commodities and foreign exchange at UBS Group AG’s wealth management unit. “If the Fed manages to keep inflation expectations anchored around the 2% mark, rate cuts will send real interest rates down into negative territory and so consequently, gold can perform well in this environment.”
Read more: https://www.bloomberg.com/news/articles/2019-06-21/gold-closes-in-on-1-400-as-global-central-banks-turn-dovish?srnd=premium
