Chronicle Editor
Gold pierced the $1 300 level to extend a new year rally. Investors flocked to the metal with global equities in retreat, signs of a slowdown stacking up, and the oldest of havens showing its mettle as exchange-traded funds draw in increased flows.
Futures spiked as much as 0.4% to $1 300.40 an ounce on the Comex, the highest price since June, and were at $1 297.80 at 11:21 in Singapore.
Spot prices were not far behind, hitting as much as $1 298.60.
Silver also surged, hitting the highest since July.
Gold has become the go-to commodity in the opening days of 2019 as investors contemplate a deteriorating worldwide outlook and factor in fewer, if any, Federal Reserve interest rate hikes this year.
On Thursday, a gauge of US manufacturing sank by the most since the 2008 recession a day after Apple cut its revenue outlook, fueling concern that the trade war with China is taking a bigger-than-expected toll on growth.
The partial US government shutdown has also spurred a risk-off mood.
“This rally in gold is based on investors increasingly realising that gold is ‘safe money’,” Rainer Michael Preiss, an executive director at Taurus Wealth Advisors, said before prices broke $1 300.
Preiss cited the potential downturn in the global economy, possible central bank policy mistakes, and rising US debt burden among factors spurring demand.
Earlier this week, a report showed a contraction in China’s manufacturing, while factory gauges in Italy and Poland also sank.
With equities faltering, global gold-backed ETF holdings added 67 tons last month, and in the opening days of the year rose further to the highest since June.
– Fin24
Online Reporter