Gold Posts Biggest Gain Since 2016 on Equities Rout, Fear Factor

Investing.com – Gold jumped about 3% on Thursday, its biggest one-day gain in more than two years, as tumbling stock markets on fears over rising bond yields and rates drove investors toward safe havens.

Slowing global growth and trade tensions also helped return the yellow metal return to above $1,200 an ounce, a perch that has become a gold standard in itself for bullion in recent weeks, proving its standing as a strong hedge to fiat currencies.

“Gold is finding some solid support, especially given that the stock markets are selling off,” said Fawad Razaqzada, technical analyst at forex.com.

He said Donald Trump’s branding of the Federal Reserve’s hawkish monetary policy as “mistake” and its path of rate hikes as “crazy” was further scaring investors off the dollar and towards gold.

“The next potential resistance is $1,238,” Razaqzada said.

December settled up $34.20, or 2.9%, at $1,227.60 on the COMEX division of the New York Mercantile Exchange. It was the largest daily percentage gain since June 24, 2016, Investing.com data showed. The high for the day was $1,229.90, less than $10 from the resistance cited by Razaqzada.

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 0.54% at a one-and-a-half week low of 94.71 by 2:56 PM ET (1856 GMT).

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 COMEX precious metals trading, December advanced 1.7% to $14.57 a troy ounce, while January was trading at $843.70, up 2% on the day.

Among base metals, COMEX December was down 0.7% to trade at $2.76 per pound.

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.