Which US presidential candidate does gold prefer?
Gold loves chaos and should be hitting new highs, especially with inflation coming down and with it, two rate cuts likely before year’s end.
Gold futures were approaching the $1,600 an ounce level during lunchtime trade in New York on Friday, extending a rally that kicked off in the early morning hours in Europe.
Gold traders were reacting to news that the EU will create the Troubled Country Relief Program, a fund similar to the one set up in the aftermath of the US sub-prime crisis, “to break the vicious circle between banks and sovereigns”.
Commodity Online quotes research from Commerzbank following the news that forecast a sharp rise in the price of bullion in the second half, despite gold’s recent trading behaviour that suggest investors do not regard it as less risky an asset than stocks:
“Gold is thus behaving less like a safe haven at present and more like a risky asset class,” the bank continued.
“In any case, we are confident that bargain-hunters will support gold at the current prices, and expect to see a sharp rise in price in the second half of the year. Fundamentals also strongly suggest increased platinum and palladium prices.” Commerzbank concluded.
Gold has retraced more than 10% from its 2012 peak of just under $1,800 hit in February. Gold closed at $1,564 on 30 December 2011 – should it hold current levels it would constitute the 12th annual increase in the price of the yellow metal.
Gold hit an all-time intra-day high $1,920 at the start of September last year, but then quickly fell back over the ensuing days, losing $105 or 5.6% in value in a single session.
