Gold could possibly have finally snapped away from its inertia.
On Thursday, prices posted the best gain since June 2016, once the U.K. voted to exit the European Union, after having a slump in global equity markets stoked requirement for the metal like a store needed. Bullion received another shot during the arm after data showing weaker-than-expected U.S. inflation raised speculation the Federal Reserve may slow the pace of interest rate increases.
Gold, which hit a 10-week-high of $1,226.42 an oz . on Thursday, had held near $1,200 since late August as traders weighed geopolitical risks that may raise the metal’s allure as a haven against rising interest levels that curb its appeal. On Friday, prices eased 0.3%? to $1,220.40 by midday Asian trade, but continued to be poised for the second weekly advance.
“Gold markets finally showed some life, nonetheless it took a total pummeling on equity markets to trigger demand,” Stephen Innes, head of Asia Pacific trading at Oanda Corp. in Singapore, said from a note. The softer-than-expected CPI print and risk aversion remaining front and centre provided the catalyst to test significant resistance at $1,225, he said.
A gauge of gold-mining equities tracked by Bloomberg Intelligence also had the main increase since 2016 on Thursday. On Friday, as shares in Asia steadied, Newcrest Mining Ltd., Australia’s largest producer, rose 3.8% and Zijin Mining Group Co. climbed 5.1% in Hong Kong.
? 2018 Bloomberg L.P
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