1-866-646-8465
CHARTS
0

Your Cart:

Subtotal: $0.00

Gold Hits Four-Week High as Worries Over China Hurt Stocks

Stacks of gold coins on foundation of one hundred dollar bills, indicating gold prices hit four week high

Gold hit a four-week high on Wednesday, extending gains for a third session, as persistent concerns over the Chinese economy battered stock markets, while tensions simmered in the Korean peninsula and the Middle East.

The metal is closing in on key chart levels, including the December high at $1,088.70. A sustained push above $1,088 would indicate gold may have bottomed out for now after twice rebounding from the $1,045 area in December, analysts said.

Spot gold was up 0.9 percent at $1,086.70 an ounce at 1047 GMT, while U.S. gold futures for February delivery were up $7.60 an ounce at $1,086.00, off a peak of $1,088.05, their highest since Dec. 4.

“Some risk aversion prompting safe haven flows has helped gold to stabilize and now test resistance,” Societe Generale analyst Robin Bhar said. “Physical demand has been pretty strong at the lower levels.”

“As we go higher, we could see some of that physical demand beginning to slow. Now we need investors to jump back in and look to hedge some of the uncertainties over global growth, over China, with positioning in gold.”

World stocks fell for a fifth day on Wednesday as China fueled fears about its economy by allowing the yuan to weaken further, and a nuclear test by North Korea added to a growing list of political worries.

North Korea said it successfully tested a miniaturized hydrogen nuclear device on Wednesday, setting off alarm bells in Japan and South Korea.

Relations between Saudi Arabia and Iran collapsed over the weekend after the Kingdom's execution of a Shi'ite cleric, a prominent critic of Saudi policy, set off a storm of protests in Tehran.

“The metals are likely to continue to take direction from moves in equities, developments in China, U.S. dollar swings and to a lesser extent geopolitical factors in the short term,” MKS said in a note on Wednesday.

Traders will examine the minutes of the Federal Reserve's last meeting when they are released later on Wednesday for clues about the U.S. central bank's plans for interest rate hikes.

Gold fell 10 percent last year on fears higher U.S. rates would lift the opportunity cost of holding non-yielding bullion. The Fed raised rates for the first time in nearly a decade last month and is expected to hike rates further this year.

Silver was up 0.4 percent at $14.02 an ounce, while platinum was down 0.2 percent at $886.30 an ounce and palladium was down 0.9 percent at $528.40 an ounce.

This story originally appeared in Reuters by Jan Harvey. View article here.

Recent Articles

How Does Inflation Impact Gold and Stocks?

How Does Inflation Impact Gold and Stocks?

Inflation plays a significant role in shaping the market price of assets like gold and stocks. While both assets are widely held, their respective performances during inflationary periods can vary dramatically. This article provides educational insights into how...

What Do Tariffs Mean for You?

What Do Tariffs Mean for You?

With aggressive U.S.-imposed tariffs dominating headlines, it’s crucial to understand their far-reaching consequences for American consumers. While tariffs aim to combat unfair trade practices, protect domestic industries, and reduce trade deficits, many experts warn...

The 2025 Market Bubble: Are We Headed for a Crash?

The 2025 Market Bubble: Are We Headed for a Crash?

The best time to prepare for an event is before it happens. This may sound obvious or even redundant, but all too often I see people who are too busy reacting to things that have already happened to prepare for what may be coming next. And according to prominent...

How Is Asset Allocation Different from Diversification?

How Is Asset Allocation Different from Diversification?

Asset allocation and diversification are two strategies often used in portfolio management. While they may seem similar, they serve different purposes for managing risk and protecting wealth. Understanding how these strategies differ is key to building a resilient...

Why I Am Optimistic About Gold in 2025

Why I Am Optimistic About Gold in 2025

“Well, Director Diehl, you were spot on with your gold price forecast last year. What does your crystal ball say about 2025?” First, I don’t have a crystal ball. I make my calls based on assessments of the forces that determine prices in the 21st-century market. Other...

Start diversifying today

   1-866-646-8465

As one of the largest distributors of precious metals in the nation, U.S. Money Reserve gives you access to our highly-trained team.

U.S. Money Reserve Gold Kit and Global Gold Forecast Special Report Thumbnail
The Ultimate Guide

Free Gold Information Kit

Sign up now to receive the ultimate guide to gold ownership, unlock special offers, and more.