Gold prices extended a six-day rally to a new record high on Wednesday, as investors sought safe havens amidst a global selloff in equity and bond markets. Bullion for immediate delivery climbed 0.4% to $3,546.96 an ounce, continuing a five-percent surge over the past week.
The flight to gold is driven by growing investor nervousness over the future of the US Federal Reserve, following President Donald Trump’s attempt to dismiss Reserve Governor Lisa Cook. “The risk is that the USD further loses its safe haven appeal if President Trump continues to undermine the independence of key US institutions, particularly the Federal Reserve,” said Carol Kong of the Commonwealth Bank of Australia, noting that gold has already gained over 30% year-to-date.
Stephen Innes of SPI Asset Management described gold as a “last resort” as both bonds and equities faltered. He also pointed to the dollar’s strengthening and renewed trade tensions, which are impacting Asian markets.
In Asia, stocks were broadly down. Tokyo’s Nikkei 225 fell 0.3% and the broader Topix Index dropped 0.5% as traders reacted to political uncertainty at home. The selloff was triggered by a senior official in Japan’s ruling party offering to resign over a recent election loss.
– Key figures at around 0230 GMT –
Tokyo – Nikkei 225: DOWN 0.25 per cent at 42,206.05
Hong Kong – Hang Seng Index: UP 0.1 per cent at 25,534.44
Shanghai – Composite: DOWN 0.6 per cent at 3,837.61
New York – Dow: DOWN 0.6 per cent at 45,295.81
Euro/dollar: DOWN at 1.1627 from $1.1640 on Tuesday
Pound/dollar: DOWN at 1.3365 from $1.3394
Dollar/yen: UP at 148.87 from 148.37 yen
Euro/pound: UP at 86.99 pence from 86.92 pence
Brent North Sea Crude: FLAT at $69.13 per barrel
West Texas Intermediate: UP 0.8 per cent at $65.64 per barrel
AFP
