Mubasher: INTL FCStone expected gold demand to grow to the extent that prices will hit the highest level seen since 2013, as worries mount regarding heightened trade tensions as well as the health of global economy, Bloomberg reported.
The yellow metal may tap $1,400 per ounce this year, as investors avoid risky assets, Asia market analysis head Rhona O’Connell told the news outlet via phone.
“All the dominant asset classes have a question mark over them at the moment, which is generally when gold comes into play,” O’Connell said.
The precious metal is recovering from few months of bearish performance as investors eye the prospects of a global economic slowdown, while they stepped up their bets that the Federal Reserve will cut interest rates.
Demand for safe-haven assets was boosted as stock markets went volatile by the escalating US trade dispute with China sending the 10-year Treasury yields near a 2017 trough. In addition, the US’ biggest banks warned against looming recession risks.
“There’s enough elements of risk in the outlook for world economies, there’s still a degree of geopolitical risk, currencies are looking volatile, and the fact that the market’s looking at a recession, the equity markets are obviously under threat,” O’Connell said.
Gold prices on Monday retreated from a 14-month peak, after an agreement between the US and Mexico, averting threatened tariffs against goods imported from the latter.
Spot gold clocked $1,348.08 per ounce on Friday, its highest since 19 April 2018, as data from the US showed a softer-than-expected job gains in the non-farm sector.
By 2:21 pm GMT, spot gold fell by 0.83% to $1,329.75 per ounce, while US gold futures dropped by 0.96% to $1,333.20 per ounce.