Gold Rebounds With Weakening Dollar Offering Relief to Investors
Friday gave some respite to gold- though it is still lower this year despite programs by central banks globally.
(Bloomberg) --
Bullion got a reprieve Friday as the dollar halted its rally, making the metal more attractive to holders of other currencies.
Gold headed for its biggest daily gain in more than two weeks and silver advanced. Precious metals are rebounding after days of relentless selling by investors seeking liquidity to navigate the extreme volatility shaking global markets.
“This is definitely a sigh of relief for markets,” Simon Harvey, a foreign-exchange market analyst at Monex Europe Ltd., told Bloomberg Television. Still, liquidity issues will continue to create upward pressure on the dollar, he said. “In this market nothing is taken for given, you have to take every day as it comes.”
Bullion typically moves inversely to the U.S. currency, which surged to a record this week, with gold taking a back seat to the greenback as the preferred haven.
Spot gold rose 1.4% to $1,491.59 an ounce at 11:32 a.m. in New York, poised for the biggest gain since March 5. The rally pares the metal’s weekly decline to 2.5% after an 8.6% slump last week, the worst since 1983.
Other precious metals also advanced, with silver trading at $12.597 an ounce after jumping as much as 7.5%, the most since December 2014. Silver has been hard hit by the global sell-off, but there are some signs that sentiment is turning, with exchange-traded funds buying the metal in the past two days.
Many investors see current precious-metals prices as a buying opportunity.
“When I think about what would I buy in the right here and now, I would be buying gold,” Wayne Gordon, executive director for commodities and foreign exchange at UBS Group AG’s wealth-management unit, told Bloomberg TV. Prices may appreciate over three to six months, he said.
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