Gold rallies to near three week high on safe haven buying
Duncan Richardson, News Editor
11 Apr 2016, 9:46 a.m.
The gold price rallied overnight to a three week high of £884 per ounce as Asian equity markets fell and the dollar continued its recent slide.
Worse than expected economic data and uncertainty over the direction of U.S. monetary policy sparked demand for the yellow metal and unexpectedly the Japanese yen.
Janet Yellen and the Federal Reserve are adding to the uncertainty. Prior to Christmas the Fed announced their intention to raise interest rates four times in 2016, however, this now seem unlikely. Keeping interest rates near zero should support the gold price and boost the commodity sector in the medium term.
The ECB monetary policy is also boosting gold’s appeal. The ECB’s deposit rate is now -0.4% and by printing 80 billion euros a month the ECB will own a third of all Eurozone sovereign debt by 2017.
Gold is currently trading at £882.24 per ounce, silver £10.93 per ounce and platinum £688.85 per ounce.