Gold futures rally to near US$1,000 an ounce
Gold futures rallied to a six-month high near US$1,000 an ounce on Thursday as renewed economic uncertainties and inflation fears gave investors two opposing reasons to pile into precious metals as a safe haven.
Gold’s sharp rise over the past two days was driven partly by pent-up demand, because longer-term inflation expectations have been rising as central banks keep pumping money into the financial markets to jolt the economy.
« One of the reasons why gold has held steady until recently is that there has been an underlying idea we will have inflation going forward. It doesn’t appear imminent, however, so the market had not really been moving particularly on that, » said Bill O’Neill, managing partner of New Jersey-based LOGIC Advisors.
The December contract hit a session peak of US$999.50, which marked the highest price since Feb. 24, when the equities market had tanked on mounting recession fears.
« Gold was driven by portfolio diversification out of equities and back into gold as a safe haven as investors are once again reminded of those economic concerns, » said David Meger, director of metals trading with Vision Financial Markets in Chicago.