Until this month, gold held claim to the title of being one of the most boring asset classes. Prices barely budged and popularity was fading.
Now that’s all changed. Over the past few weeks, a clear bull case has started to emerge. A key resistance level has broken. Investors are pouring money into exchange-traded funds. The dollar is weakening and the Federal Reserve seems to be charting a path to cut interest rates. China is on a buying spree to stock up reserves.
“It has been a long wait,” said Mark O’Byrne, research director at GoldCore Ltd. “Gold has finally broken out, we nearly touched $1,400.”
Gold futures for August delivery rose as much as 3.6% Thursday to the highest for a most-active contract since September 2013, and traded at $1,393.90 an ounce at 12:18 p.m. on the Comex in New York.
Here are four charts that show why gold’s back in the spotlight:
The Fed
Although gold has gathered some momentum in the past few weeks, it was the Fed’s comments Wednesday that triggered the latest spike. While the central bank left its key rate unchanged, it abandoned a reference to being “patient” on borrowing costs. Lower rates boost the appeal of non-interest-bearing assets like gold.
For the rest of this article: https://www.bloomberg.com/news/articles/2019-06-20/gold-jumps-to-more-than-5-year-high-as-fed-signals-ready-to-cut-jx3zb66k