Geopolitical tensions push gold higher
Frankfurt (Apr 10) Today’s AM fix was USD 1,321.50, EUR 953.19 & GBP 787.73 per ounce.
- Yesterday’s AM fix was 1,309.75, EUR 949.92 & GBP 782.74 per ounce.
- Gold rose $2.30 or 0.18% yesterday to $1,308.80/oz. Silver lost $0.13 or 0.65% to $19.88/oz.
Gold extended gains to a third session today, scaling to fresh two-week highs above $1,320/oz. Silver surged 2.5% to $20.26/oz.
Gains were due to geopolitical tensions, dovish sounds from the Fed and the very poor exports data from China which led to concerns about the Chinese and global economy. Minutes from the Federal Reserve's policy meeting which showed that officials were not keen on increasing interest rates anytime soon are also supporting gold.
Low interest rates, which cut the opportunity cost of holding non yielding bullion above other assets, have been an important factor driving prices higher in recent years. Real interest rates are set to remain negative for the foreseeable future which will be supportive of precious metals.
Gold has gained 1.2% in the previous two sessions due to rising geopolitical tensions between Russia and NATO and the West. These tensions are set to remain and will not be resolved anytime soon.
Silver continues to be favoured by contrarian investors who see it as oversold and very undervalued vis a vis other assets including gold.
