Gold Prices Rise to Highest in 2019 on Global Growth

Gold Prices Climb To Peak

Gold prices rise to highest as concerns about economic slowdown gripped global markets and fuelled demand for safe-haven bullion. Business sectors across Europe declined in preliminary data readings in March, with German manufacturing contracting to its lowest reading in six years. “Gold is overbought on most measures and needs to integrate but with the speculative long still building, the market will be looking for $1,300 sooner than expected,” Saxo Bank analyst Ole Hansen said.

Weakness in the Economy

“It is about the weakness in the economy in the eurozone and outlook for interest rates which makes holding gold more attractive,” said Quantitative Commodity Research analyst Peter Fertig. A warning by Apple Inc on revenue rocked financial markets on Thursday amid the backdrop of worries over slowing global economic and corporate growth. Gold is traditionally considered a safe investment during times of uncertainty and weakness in the U.S. dollar has added to demand for the valuable metal by making it cheaper for holders of other currencies.

Performance of Gold

“The performance of gold in other currencies than the U.S. dollar is driven by the performance of these currencies versus the dollar,” said Julius Baer analyst Carsten Menke. Gold is highly tactful to interest rates, as lower rates tend to pressure the dollar and increase investor interest in non-yielding bullion. “We see the gold market in a longer-term recovery, driven by a combination of normalization of market sentiment, a weakening U.S. dollar and returning investment demand.”

The European Union has given the U.K. until May 22 to leave the bloc, provided the British Parliament passes Prime Minister Theresa May’s Brexit deal next week. However, should the bill fail to pass, the EU has pushed back the official withdrawal date by two weeks to allow Parliament time to come up with another solution and prevent the U.K. from crashing out without a deal. “Gold prices have behaved as you would expect during the recent period of uncertainty, rising as expectations of Fed tightening next year have been cut sharply and equities have sold off.”

Other metals were lower on the Comex, with silver futures down 0.1% to $15.428 a troy ounce. Among other precious metals, platinum futures fell 1.2% to $850.80, Copper futures slipped 1.6% to $2.860 a pound. Palladium futures slumped 1.9% to $1,528.50 an ounce. However, prices recovered as the dollar fell after separate data from the Institute for Supply Management (ISM) showed the U.S. manufacturing activity index at its lowest.