|Charlotte McLeod reports that the gold price surge continues. The gold price rocketed 5% Thursday to reach $1,260.60 per ounce. That is its highest level since last February and its biggest daily gain in 7 years. Speaking to Reuters, Macquarie analyst Matthew Turner said that there is a good explanation for the gold rally. It is to do with worries about the U.S. economy and the rest of the world.|
But what exactly prompted this sudden increase in concern about the global economy? Addressing that question, Reuters states that fears were spurred partially by a fall in European bank shares, with U.S. Treasury yields and a lower U.S. dollar not helping the situation.
However, some believe investor concerns are more widespread than that. In conversation with Kitco, Afshin Nabavi, head of trading with MKS (Switzerland), quipped that the investor anxiety is being spurred by everything under the sun, including weaker oil prices and a rout in global equities, in addition to the lower U.S. dollar.
Whatever the specific catalysts behind the gold surge, it is clear at this point that investors are beginning to think of the metal as a safe haven once again. And so far the consequences of that have been impressive, gold has now gained 20% so far in 2016, making it the best-performing commodity of the year. Of course, for investors, the real question is whether the current gold price rally will continue. Opinions vary on the matter, but many are optimistic.