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The Wall Street Journal reported that gold futures for the most actively traded contract were up 1.3 percent, at $1,155.60 per ounce, early Wednesday.
The Wall Street Journal reported that gold futures for the most actively traded contract were up 1.3 percent, at $1,155.60 per ounce, early Wednesday. All in all, the yellow metal has risen 9 percent since the start of 2016, spurred on by “weakening economic data around the world and turbulent financial markets.”
As quoted in the market news:
Last year, the gold market sold off as the Federal Reserve moved to implement its first interest rate increase in nine years, and the rate outlook supplanted safe-haven concerns as a key driver of gold prices.Gold struggles to compete with yield-bearing securities when interest rates rise.
But now, the new headwinds have come to weigh on investor expectations of the Fed’s determination to continue raising interest rates this year and renewed the appeal of gold.
The data suggests “that the weakness in the industrial sector may now be spilling over to the previously robust service sector,” said analysts at Commerzbank. “As a result, expectations of interest rate hikes further declined.”
Gold was also supported by the softer greenback, which makes the dollar-denominated metal cheaper for other currency-holders to purchase. The WSJ Dollar Index was recently down 0.7%.
Adding to potential demand, Chinese buyers are expected to continue increasing their demand for gold this year.
Click here to read the full report from The Wall Street Journal.
