Gold shines as investors shun risk
With growing fears of another global recession, gold on Thursday struck $1,263.47 an ounce - the highest level since February 6, 2015. Gold prices glistened last week, striking oneyear highs as the precious metal benefitted from its status as a haven investment in times of economic turbulence.
With growing fears of another global recession, gold on Thursday struck $1,263.47 an ounce - the highest level since February 6, 2015. "Gold's status as the ultimate safe haven asset has well and truly been confirmed, yet again," said Fawad Razaqzada, analyst at City Index trading group.
"The buck-denominated precious metal has also benefitted from a weaker dollar as hopes about further 2016 rate rises from the Federal Reserve have basically been dashed."
Investors have been pouring into gold and other haven investments such as the Japanese yen, as stock markets tumble on rising concerns over the global economy, in particular regarding slowing growth in China.
"The gold price is benefitting from tailwind generated by stock markets... reflecting the risk aversion displayed by market participants," Commerzbank analysts said in a note to clients.
China is still set to support demand for the metal going forward, WGC predicted last week.
"Physical demand will continue to be supported by strong central bank purchases, and continued buying of jewellery, bars and coins by households across the world, led by India and China," said Alistair Hewitt, head of market intelligence at the WGC. "If we just look at the year to date, the investment case for gold is as strong as ever. While stock markets have wobbled, gold has performed well."
The WGC published its report for 2015, which said that total demand for gold was virtually flat compared with a year earlier at 4,212 tonnes. Gold's stellar performance meanwhile helped sister metal silver to reach a near four-month high at $15.96 an ounce last week.