Gold starts a new trading week edging slightly higher to underline that the haven asset remains in demand despite the aggressive monetary policies adopted globally by central banks.
A slight weakening in the US dollar has given gold more breathing space and enabled the precious metal to climb further away from the $1,700 an ounce threshold.
The fact that equities and the Euro are also gaining suggests that today’s moves are largely corrective ones after a punishing recent period for both stock markets and the single currency – with gold a willing beneficiary of this slight reappraisal.
While today’s upward tick will be applauded by gold investors, it remains hard for gold to make considerable gains in the current environment – with momentum gaining for the European Central Bank to follow the Federal Reserve’s lead and implement a further series of large interest rate hikes over the coming months.
Added to that is the positive news coming out of Ukraine with the Russian forces losing large amounts of territory in a surprising reversal of fortunes.
The war has been one of the supportive factors for gold and while an end to the conflict would be celebrated around the world, gold would likely see its price dip as demand for the ultimate safe haven that has endured through centuries of wars. However, that point still remains some distance in the future.
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.