Gold Bounces Back
Video Length: 00:02:26
Today’s hot topic is all about the Gold rush!
- Gold surged $30 on Friday, that’s a massive 2.6% rise.
- Bullion was the best performing metal last month, appreciating 9%.
- Are we seeing the comeback of Gold?
Let’s find out what’s going on.
- Last Friday’s NFP release saw new job creation well short of the expected 191 thousand to just 151 thousand.
- However, we also got a multi-year low for unemployment at 4.9% and a rise in average hourly earnings delivering a mixed bag of employment data out of the US
- These figures have investors questioning further Fed hike rates especially for next March.
- How did gold respond? We saw an initial rise in spot gold after the jobs report, then a session low to $1145 an ounce, but by Saturday it rose to a new high of $1165 – up 0.8%, the highest it’s been since last October.
- Here’s the link between gold and US jobs data. Essentially, improved jobs means a greater likelihood of another rate hike by the Fed in March.
- And as gold is a non-interest bearing asset and priced in US dollars, it becomes less attractive if US interest rates rise.
- The shaky global economy is also working in gold’s favour, with the precious metal bucking the commodities down trend, and gaining almost 10% since the start of this year.
- On another front, we know gold is a safe haven, and geopolitical tensions rose with the launch of a missile in North Korea on Sunday.
What’s coming up for gold?
- Retreating equity markets
- Slowing Chinese economy
- Geopolitical tensions in the Korean peninsula
- Uncertainty over future rate hikes by the Fed
- And global economy recovery hiccups.
- All these factors have been gathering momentum lately and all paint a rose picture for the shiny metal and its investors.
With more and more analysts turning bullish for gold and predicting prices rising above $1200, where do you stand? Is this the beginning of the gold come-back?
Disclosure: None.