(Bloomberg) — Gold investors are bracing for increased market anxiety as the worst selloff in oil since 1991 spurred a massive slump in equities.
Bullion jumped above $1,700 an ounce when markets opened in Asia, before pulling back, as money managers cashed in gains to cover losses in other assets. A 30-day measure of expectations for price swings for the metal climbed to the highest since December 2015.
While gold is viewed as a classic haven popular during times of turmoil, it’s been a bumpy move up in the past month. While the need to raise cash has prompted some investors to sell the metal, increasing bets the Federal Reserve will cut borrowing costs are boosting the appeal of the non-interest bearing asset.
“In terms of volatility, it is normal especially when the market is expecting the March Fed meeting to be a live one,” Naeem Aslam, chief market analyst at Ava Trade, said by email Monday. “The fact that the price has broken the 1700 mark, it leads us to believe that there are strong chances for the price to cross this level again.”
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