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.

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