Gold Prices Climb Over 1%, Regains $1,200 Level amid Stock Rout

Investing.com – Gold prices rose more than 1% on Thursday, regaining the psychologically important $1,200 level as a rout in global stock markets spurred by fears over rising bond yields, slowing global growth and trade tensions bolstered safe haven demand.

December were up $13.90 or 1.16% to $1,207.30 by 07:45 AM ET (11:45 GMT) on the Comex division of the New York Mercantile Exchange. Prices settled at $1,189.30 on Wednesday.

Safe haven demand for the precious metal was boosted amid steep declines in global stock markets as investors dumped assets perceived as riskier.

The selloff was triggered by a combination of concerns over the impact of rising bond yields and fears that trade conflicts are starting to have a serious impact on the global economy.

pointed to a sharply lower open, a day after the largest decline on Wall Street in more than eight months.

The declines came despite a rally in U.S. Treasuries. The yield on the benchmark , which moves in the opposite direction to price, moved higher as investors sought safety from the global equities sell-off.

Treasury yields started to climb last week amid expectations for a faster than expected pace of rate hikes from the Federal Reserve as the outlook for the U.S. economy remains strong.

Gold received an additional boost from the broadly weaker dollar, with the , which measures the greenback’s strength against a basket of six major currencies, down 0.39% to a one-and-a-half week low of 94.86.

A weaker dollar can make dollar denominated assets, like gold, less expensive to potential buyers holding other currencies.

Expectations for rising interest rates look likely to remain a headwind for gold prices. Interest rate increases and higher U.S. bond yields dampen appeal for gold, which offers no yield. They also tend to boost the dollar.

Elsewhere in metals trading, December advanced 0.59% to $14.41 a troy ounce, while January was trading at $829.00, up 0.18% for the day.

Among base metals, December was down 1.42% to trade at $2.741.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.