Gold prices surged on Thursday as investors tried to escape the global market rout by hiding in safe-haven assets.
Gold for April delivery GCJ6 jumped $41.30, or 3.5%, to $1,235.90 an ounce, setting it on track for the highest close in about a year.
The move came as equities tanked in Asia and Europe and U.S. stock futures pointed to a sharply lower open on the back of uncertainty over growth in the global economy.
“Gold’s sudden waking from its slumber has caught many people by surprise, myself included,” said Fawad Razaqzada at FOREX.com, in a note. “Likewise, the stock market plunge has lasted a lot longer than what most people had probably envisaged when it first started to descend. Clearly, gold’s status as the ultimate safe haven asset has well and truly been confirmed, yet again,” he added.
The nervousness came after U.S. Federal Reserve Chairwoman Janet Yellen acknowledged in her congressional testimony on Wednesday that jitters in international financial markets and the world economy could impact the outlook for the U.S. Yellen also signaled that the central bank could postpone further rate increases if the current weakness in global markets persist, although she wasn’t as dovish as investors were hoping for, analysts said.
Yellen’s comments spurred a flight away from risky assets such as the dollar and equities, sending investors hunting for safe havens such as gold and the yen. The dollar slumped to its lowest level since 2014 against the yen, trading at ¥111.39 from ¥113.60 late Wednesday. Yellen returns to Capitol Hill on Thursday with an appearance before the Senate Banking Committee at 10 a.m. Eastern Time.
“Renewed ETF inflows have been lending support to the price surge: in the first eight days of trading in February, just as much gold has flowed into the ETFs as did in the whole of January,” analysts at Commerzbank said in a note.
In other metals, silver for March SIH6, +2.96% rose 2.4% to $15.65 an ounce, while copper for the same month HGH6, -0.52% lost 0.6% to $2.02 per pound. April platinum PLJ6, +2.98% added 1.7% to $950.10 an ounce and March palladium PAH6, +0.35% gained 0.2% to $525.90 an ounce.
This story originally appeared in MarketWatch by Sara Sjolin on February 11, 2016. View article here.
On September 26, 2022, Reuters reported that gold prices fell to $1,621.50/oz.—its lowest price since April 2020. Just a few days earlier, on September 23, 2022, CNBC quoted Steve Hanke, a professor of applied economics at John Hopkins University, as saying, “There’s...