“Bonds, Dollars, Investor Sentiment are all in favor of Gold”
(Seoul = Yonhap Infomax) Correspondent Yoon Si-yoon = With gold prices approaching all-time highs, bonds, the dollar and investor sentiment are all expected to further boost gold prices.
On the 4th (local time), Barron’s, an investment media outlet, reported that “the decline in the value of the dollar, the collapse of bond yields, and the risk aversion sentiment are increasing the attractiveness of gold.”
In particular, the media analyzed that the recent near-high gold price reflects expectations that the Federal Reserve’s interest rate hike will end soon and concerns about the US economic recession.
According to Yonhap Infomax Commodity Futures Comprehensive (screen number 6900), the June gold futures price traded on the New York Mercantile Exchange closed at $2,038.20 per ounce, up $37.80 (1.9%) from the previous day.
Gold has risen to $2,043.40 intraday, surpassing the all-time high of $2,069.40 set in August 2020.
Gold prices are up 12% over the past month. This is a 25% increase from the level of November last year, which was the recent low.
The media analyzed that gold prices are generally determined by three factors: bond yields, the dollar, and investor sentiment, all pointing to a further rise in gold prices.
The recent fall in the value of the dollar has led to a rise in the price of an ounce of gold, the collapse in bond yields, and risk-avoidance sentiment, all of which increase the attractiveness of gold as a safe-haven asset.
In fact, bond yields fell last month.
The two-year U.S. Treasury yield rose to 5.1% early last month, the highest level since 2007, but has since slipped to about 3.8% the day before.
The media added, “If gold prices break through $2,000 per ounce, the psychological barrier will be crossed.”
Meanwhile, as the price of gold rose, so did the stock prices of companies that produce and sell gold.
Gold mining company Newmont (NYS:NEM) is up about 20% over the past month and VanEck Gold Miners ETF (GDX) is up about 28%.
syyoon@yna.co.kr
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This article was served at 10:16, 2 hours earlier on the Infomax financial information terminal.
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