Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
💰 With a 129% YTD gain in the bag, these are our AI’s top global picks for March
Read now
Gold Climbs Above 1,300
www.investing.com/analysis/gold-prices-climb-above-$1,300-an-ounce-200136881
Gold Climbs Above 1,300
By MetalMiner | Jun 20, 2016 04:04AM ET Gold is recovering its strength this month. Prices last week rose to the highest levels in almost two years. We already pointed out last month that prices had upside potential.
There are mainly three factors contributing to the price move:
Gold Daily Chart
Economic Fears
The yellow metal is being bought as a hedge against falling global stocks. The unusually dovish comments from the Federal Reserver last Wednesday showed a lot more pessimism on the U.S. and global economy while investors fear that central banks are losing their ability to boost global stocks or economies. Moreover, this week’s British Bexit vote is causing a lot of global volatility.
NYSE Composite Index acting like 2007’s top. Source: stockcharts.com
As we warned in May, stock markets pulled back in June. There is no guarantee that the worst has passed. Indeed, so far we are just witnessing choppy action.
U.S. stock indexes have shown only back-and-forth action for more than a year now. This market action is typical of a market top, which could potentially make more money rotate into gold.
Treasury Yields Tumble to a 4-Year Low
TNX Daily Chart
The 10-year treasury yield settled at 1.56%, the lowest level in four years. The lower the yield, the lower the returns investors get from their bonds. That’s important, because in periods where yields are near zero, many investors prefer to buy gold rather than bonds that practically pay zero. In this manner, in the current a stock market turmoil, part of the money that would normally go to bonds is going to gold.
Weak Dollar
Last week, the Federal Reserve left interest rates unchanged and officials lowered the outlook for rate increases in the coming years, indicating how officials’ views are changing. The Fed doesn’t see rates going as high as it thought they would before and, if this trend continues, the dollar could continue to weaken which would support metal prices.
Moreover, the Japanese yen surged after The Bank of Japan (BOJ) stood pat last week. Economists expected the BOJ to take additional action in recent months, after the bank repeatedly vowed to take action if the central bank’s 2% inflation target was in danger. The yen could continue to appreciate against the U.S. dollar, which is good for gold.
by , Raul de Frutos
Related Articles
Week Ahead: Highlights Include US CPI, UoM, BoC, UK GDP and Norwegian...
By Ryan Anderson - Mar 07, 2025
MON: Eurogroup Meeting, Norwegian CPI (Feb), EZ Sentix Index (Mar), Japanese GDP (Q4) TUE: EIA STEO WED: 25% US tariff on all imports of steel and aluminium comes into effect,...
Trade Wars 2.0: What Will Trump's New Tariffs Lead To?
By Omer Guzel - Mar 07, 2025
Brief Reminder In 2018, US President Donald Trump initiated a trade war update with sanctions against China. Economic disagreement between the United States and China began in...
US Stocks Continue to Vote Down Trump’s Tariffs—More Downside Ahead?
By Trading Point - Mar 07, 2025
1
Trump’s U-Turns Keep the Market Under Pressure Both US equity indices and the US dollar remain under severe stress as US President Trump continues his back-and-forth on the...
Gold Climbs Above 1,300
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.