Gold is sitting pretty comfortably above $2,000 an ounce after last month’s surge of safe haven demand has now been sustained by the prospect of the Federal Reserve nearing the end of its interest rate hike cycle.
After March proved a fantastic month for gold, the price has continued to climb higher so far in April to reach levels not seen for over a year. While the initial fears of a broader banking crisis now look to be contained, market confidence remains low with investors keeping their risk-averse trades in place.
The market conditions play right into gold’s hands with the precious metal further supported by a weakening of the US dollar, against which gold typically enjoys an inverse relationship. Add in the likelihood of gold’s major headwind, rising Fed interest rates, coming to an end in the months ahead and the short to medium-term course for the ultimate haven asset looks set fair.
With the price now having broken through the $2,000 an ounce barrier with sufficient strength to hold above this key psychological threshold, it looks like gold can continue to trade at these elevated levels until market confidence picks up and traders’ outlook towards equities and the health of the global economy turns more optimistic. Right now, that looks some way off.
Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.
As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.
This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.
