The price of gold has struck a five-month high as investors take a risk-off approach amid escalating geopolitical tensions, a weaker US dollar and a Wall Street slide.
And economists predict the metal’s price could continue to be carried higher as the market awaits further Federal Reserve interest rate hikes. So far this month the precious metal has gained almost 4 per cent to hover just below $US1300 an ounce — its strongest point since Donald Trump’s election sent the commodity higher in early November.
Australian gold miners have been the best performers of the month on the S&P/ASX 200, with Northern Star Resources shooting up 19.7 per cent, St Barbara gaining 18.9 per cent, Evolution Mining jumping 16.7 per cent and Newcrest Mining up 12.8 per cent.
And with up to two US interest rates expected this year and some economists predicting as many as four in 2018, alongside political tensions mounting between the Trump administration, Syria and North Korea, gold prices could keep strengthening.
“I think gold is going higher here,” Jason Schenker, president and chief economist at Prestige Economics, told Bloomberg recently.
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