Gold rises to high­est level in year as US eq­ui­ties fall sharply

The Pak Banker - - MARKETS/SPORTS -

Gold fu­tures on the COMEX divi­sion of the New York Mer­can­tile Ex­change rose sharply on Thurs­day as U.S. eq­ui­ties took a sharp down­turn in re­ac­tion to a de­creas­ing cost of oil.

The most ac­tive gold con­tract for April de­liv­ery rose 53.2 U.S. dol­lars, or 4.45 per­cent, to set­tle at 1,247.80 dol­lars per ounce. This set­tle­ment is gold fu­ture's high­est level since Feb. 5, 2015. The fea­ture of the day has been eco­nomic in­sta­bil­ity and gold is up sharply be­cause of it, an­a­lysts said. The U.S. Dow Jones In­dus­trial Av­er­age took strong pres­sure from the fall­ing price of oil and at one point had fallen by more than 300 points. As of 19:00 GMT, the Dow Jones had lost 1.71 per­cent.

An­a­lysts noted that when eq­ui­ties post losses, the pre­cious metal usu­ally goes up, as in­vestors are look­ing for a safe haven, while the op­po­site is true when U.S. eq­ui­ties post gains. Traders are in the process of rush­ing to the pre­cious metal be­cause of it's safe haven prop­er­ties.

Gold was given fur­ther sup­port on U.S. Fed­eral Re­serve's Chair­woman Janet Yellen's tes­ti­mony to Congress. Prior to Yellen's ad­dress to the U.S. Congress on Wed­nes­day, the cen­tral bank hinted that it could still raise rates in March. How­ever now that Yellen tes­ti­fied to Congress that the in­creases would be grad­ual, many an­a­lysts be­lieve that the next rate hike will oc­cur much later in the year. Sil­ver for March de­liv­ery rose 51.2 cents, or 3.35 per­cent, to close at 15.794 dol­lars per ounce. Plat­inum for April de­liv­ery added 29 dol­lars, or 3.1 per­cent, to close at 963.20 dol­lars per ounce.

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