Gold hits $1,500 per ounce, investors seek safety in bonds

LONDON: Money poured into the world’s bond markets yesterday as investors shunned riskier investments such as stocks for the relative safety of government debt. Gold, another safe-haven favorite, rose to levels last seen six years ago.

As bond prices surge, their yield or returns to investors fall, with benchmark 10-year government paper in the US and elsewhere dropping to multi-year lows. Markets now believe that the world’s key central banks will cut interest rates further to stave off, or at least alleviate, any coming slowdown, analysts said.

Commodity markets also followed the logic of economic worry, with safe-haven investment gold surging and oil, the fuel of economic growth, falling.

Gold hit $1,500 per ounce for the first time since 2013. “We see the ongoing steep rise in the gold price as an expression of the high risk aversion among market participants,” said Commerzbank analysts. “Gold is quite clearly still in demand as a safe haven in the current market environment.”

London Brent oil slid to its lowest level since early January, while New York crude touched depths last witnessed in mid-June. “It is concerns about demand in connection with the trade conflict that are putting pressure on prices,” Commerzbank said.