Gold rates rose on Thursday against a weakening US Dollar and failing stock markets. This is driving investors toward safe haven assets like gold. This allowed spot gold to go up by 0.6 percent to trade at $1,274.53 per ounce, briefly hitting $1,279.06, its highest since June 19.
Meanwhile the gold rate today in India fell by a modest Rs. 50 to Rs. 32,450 per 10 grams, mainly because of low demand from local jewelers. Sovereign prices went up by Rs. 100 to Rs. 25,100 per eight grams.
US Gold Futures gained 0.3 percent and rose to $1,277.00 for an ounce. Lending support to gold rates is the weakening dollar and the dwindling US stock indexes which have been forced to pull back significantly. Global equities tanked after Chinese industrial profits slumped, indicating that the global economy is under increased pressure. US stocks also plummeted sharply on Thursday’s market.
The dollar index fell by 0.5 percent on Thursday, a strong indicator of gold becoming cheaper for other currencies. Meanwhile the US government shutdown is widely expected to continue on Jan 3, as Democrats are split over Donald Trump’s demand for $5 billion in funding to build a Mexican border wall.
The border wall is one of the pending campaign promises of Mr. Trump, which he repeatedly iterated throughout his presidential campaign. But all this political instability has thrown off the US stocks market and has boosted investor confidence in the precious metals industry.
This trend can be confirmed by observing the recent surge of SPDR holdings, the world’s largest exchange traded funds. SPDR holdings went up by 2.1 percent on Wednesday, registering the best percentage gain since July 2016.
The precious metals market as a whole has benefited from the global economic slowdown, with silver rising up by 0.8 percent to $15.15 for an ounce and palladium gaining 0.1 percent to $,1256 for an ounce.
Platinum prices slipped by about 0.2 percent to $793.30 per ounce, but prices will gain in the future in what can be described as a see-saw movement. Silver coins traded at a price of Rs. 76,000 for selling and Rs. 75000 for buying every 100 pieces.
In a report announced by the Conference Board today, the Consumer Confidence Index has slipped to 128.1 this month from the highs of 136.4 in November. “Expectations regarding job prospects and business conditions weakened, but still suggests that the economy will continue expanding at a solid pace in the short term,” says Lynn Franco, a Senior Director of Economic Indicators at The Conference Board.
Results Pouring in From Online Poll by Metal Investors
Supporting the bullion’s bullish journey in 2019 are results from an online poll carried out by Bullion Vault, an online dealer of gold. The company found that 80 percent of investors likely feel that gold prices will increase in the year 2019.
Many external factors that will increase investor confidence in gold, these include the trade war between the US and China, political issues stemming from the Brexit issue, and the ongoing partial shutdown by the US government.