Gold rose to its highest price level in more than a month on Monday, as fears about a slowing economy and expectations of easy US money policies prompted safe-haven demand. Bullion prices have gained nearly 6 percent in the past three weeks, boosted by a string of disappointing US economic indicators including Friday's weak job data.
"A lot of people are taking their risk off by getting out of the S&P 500 and other riskier assets. There is too much uncertainty with the US currency and the euro. So, people think the safest place is the gold market at the moment," said Phillip Streible, senior market strategist with Lind Waldock, a unit of futures broker MF Global.
Spot gold was up 0.7 percent at $1,553.50 an ounce by 12:22 pm EDT (1622 GMT), building on three consecutive weeks of gains and rising to its highest level since early May. Bullion hit a record $1,575.79 an ounce on May 2. US August gold futures gained $10.40 to $1,552.20. Spot silver rose 2.4 percent to $37.055, rebounding from near two-week lows in the previous session, bringing the gold/silver ratio to 42.1, its lowest since Thursday, denoting its outperformance over gold in the last few trading days.
Silver prices have fallen by more than a quarter since hitting a record $49.51 on April 28 but are still up 19 percent on the year, compared with gold's 9 percent rise. Friday's surprisingly weak US employment data kept the dollar near one-month lows and suppressed investor risk appetite.
"Weak US economic data last week are strengthening expectations that the Federal Reserve will maintain key interest rates at the current very low level for even longer, which will keep the opportunity costs for precious metals low," Commerzbank said in a note. Uncertainty over the future of Yemen while President Ali Abdullah Saleh was recovering from injuries sustained in an attack on his palace on Friday also unnerved markets.
Comments
Comments are closed for this article.