The Strategist

Gold rises above $1,500 per ounce for the first time in six years


08/08/2019 - 12:03



For the first time since 2013, the cost of an ounce (28.35 g) of gold exceeded $ 1,500 due to increased demand for defensive assets amid fears of an escalation of the trade war between the United States and China and expectations of easing monetary policy by leading central banks of the world.



skitterphoto
skitterphoto
Gold quotes on the Comex exchange in New York rose during trading by 1.3%, to $ 1,503.3 an ounce. Since the beginning of the year, the precious metal rose by 17%.

Gold, classified as a safe haven asset, rises in price amid the collapse of global stock markets. The fall was caused by US threats to impose new duties on imports of Chinese goods and Beijing's promises to give a symmetrical response to such measures.

In addition, in recent weeks, the Federal Reserve System (FRS) has lowered the base interest rate, while the European Central Bank (ECB) and the Bank of Japan have signaled their readiness to take such a measure in the future. On Wednesday, the Central Bank of India and New Zealand lowered rates more than market expectations.

With lower rates, the attractiveness of precious metals as investment tools increases.

“Gold is once again playing the traditional role of a defensive asset,” said Wayne Gordon, executive director of the commodity and foreign exchange markets at UBS Group. In his opinion, the price of gold can reach $ 1.6 thousand per ounce in case of escalation of the trade war.

Spot silver prices on Wednesday rose to a maximum for the year mark of $ 16.808 per ounce.

source: bloomberg.com




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