Fear of War Sends Gold to Highest Price Since 2013 -- Update
06 Gennaio 2020 - 11:22PM
Dow Jones News
By Joe Wallace and Amrith Ramkumar
Gold jumped to its highest level in almost seven years with
tensions between the U.S. and Iran escalating, the latest example
of investors favoring the safe-haven metal to protect against a
market downturn.
A recent advance for bullion extends a booming rally that began
last year, when uncertainty about global trade policy and fears
about an economic slowdown propelled gold to its best annual
performance since 2010. The gains have been a boon for investors
who watched the climb in gold lose momentum briefly in the fourth
quarter before resuming again in late December. Producers such as
Newmont Goldcorp and Barrick Gold Corp. have also benefited.
Monday's rise came after President Trump reiterated his threat
to strike Iranian cultural sites if tensions between the two
countries escalate and as traders awaited Tehran's response to the
death of Maj. Gen. Qassem Soleimani. The targeted killing last week
raised fears of a broader conflict between the U.S. and Iran,
adding fuel to the gold rally.
"The move that we've seen in the past few days is clearly
related to the escalation in the Middle East," said Norbert Rucker,
head of economics at Swiss private bank Julius Baer. "The attack
sent some tremors that were felt beyond the oil market itself and
resulted in a flight to safety, which is exactly what we've seen in
the gold market."
Front-month futures for January delivery rose 1.1% to $1,566.20
a troy ounce on the Comex division of the New York Mercantile
Exchange Monday, recording their highest close since April 2013 and
eclipsing their peak from early September. Prices have risen more
than 7% in the past month alone and are up 23% from a low hit last
year.
In another sign of upbeat momentum, gold climbed for the ninth
consecutive session, its longest such streak since Jan. 5, 2018.
Back then, a weakening dollar propelled the metal higher for 11
days in a row by making the metal cheaper for overseas buyers.
A softening dollar has supported gold again recently with some
analysts expecting momentum in the world economy to shift overseas
from the U.S. The WSJ Dollar Index, which tracks the U.S. currency
against a basket of 16 other currencies, closed at its lowest level
since March last week.
The dollar's recent slide has bolstered already-steady gold
demand. Jeffrey Currie, head of commodities research at Goldman
Sachs, noted that the metal performed well at the start of both
Gulf Wars and following the Sept. 11 attacks in 2001.
Hedge funds and other speculative investors are positioned for
further gains. They increased net bets on rising gold prices for
the third consecutive week and pushed net bullish bets to their
highest point since late September during the week ended Dec. 31,
Commodity Futures Trading Commission figures show.
Gold has also benefited from a drop in government-bond yields
around the world in recent months. Lower yields make it less likely
that investors will miss out on outsize returns by owning bonds as
a safe asset rather than gold. On Monday, the yield on the
benchmark 10-year U.S. Treasury closed at 1.809%, down from 1.909%
at the end of 2019. Yields fall as prices rise.
Shares of many precious-metals miners advanced Monday, with
Newmont Goldcorp rallying 1% after the company said it is raising
its quarterly dividend paid to shareholders to 25 cents from 14
cents previously. Mining stocks have gotten a boost from a broad
rise in precious metals. Silver prices stand at a three-month
high.
As well as buying futures and mining shares, one of the most
popular ways to invest in gold is through exchange-traded funds.
After Gen. Soleimani's killing, more than $56 million flowed into
the iShares Gold Trust ETF on Friday, according to FactSet.
Wenyu Yao, a metals strategist at ING, expects investors to plow
more money into gold-backed ETFs in the coming days as traders
return to work following the New Year break.
Other gold-market observers and participants caution that gold
prices are unlikely to rise much further. "The market is really
long," said Georgette Boele, a strategist at ABN Amro, adding that
investors are likely to sell the metal to capture profits from the
recent rise in prices.
Write to Joe Wallace at Joe.Wallace@wsj.com and Amrith Ramkumar
at amrith.ramkumar@wsj.com
(END) Dow Jones Newswires
January 06, 2020 17:07 ET (22:07 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Grafico Azioni Barrick Gold (TSX:ABX)
Storico
Da Feb 2024 a Mar 2024
Grafico Azioni Barrick Gold (TSX:ABX)
Storico
Da Mar 2023 a Mar 2024