An employee arranges a window display of gold jewelry at a store in the Grand Bazaar, also known as Kapalicarci market, in Istanbul, Turkey. (Photographer: Kostas Tsironis/Bloomberg)

Gold Revitalized as Equity Sell-Off Spurs Second Weekly Advance

(Bloomberg) -- Gold may have finally snapped out of its inertia.

Prices largely held the biggest gain since June 2016, when the U.K. voted to exit the European Union, after a slump in global equity markets stoked demand for the metal as a store of value. Bullion received another shot in the arm during Thursday’s surge after data showing weaker-than-expected U.S. inflation raised speculation that the Federal Reserve may slow the pace of interest rate increases.

Gold, which hit a 10-week-high of $1,226.42 an ounce on Thursday, had held near $1,200 since late August as traders weighed geopolitical risks that could boost the metal’s allure as a haven against rising interest rates that curb its appeal. On Friday, prices dropped but gold still poised for a second weekly advance. Most Asian and European stocks recovered after the biggest sell-off in global equities since February, as U.S. stock futures extended gains and Treasury yields ticked higher.

Gold Revitalized as Equity Sell-Off Spurs Second Weekly Advance

“Gold bulls were unstoppable on Thursday as global risk aversion sent investors sprinting to safe-haven assets,” said Lukman Otunuga, research analyst at brokerage FXTM. “Although gold prices are noticeably weaker this morning, bulls remain in the driving seat above the $1,213 level. While the technical outlook points to further upside, fundamentals are still in the bear’s favor.”

A gauge of gold-mining equities tracked by Bloomberg Intelligence also had the biggest increase since 2016 on Thursday. On Friday, Randgold Resources Ltd. gained 4 percent, Newcrest Mining Ltd., Australia’s largest producer, rose 3.3 percent and Zijin Mining Group Co. climbed 5.5 percent in Hong Kong.

Other precious metals
  • Silver +0.2%
  • Platinum steady, set for 4th weekly advance in last 5 weeks
  • Palladium +0.9% to $1,089/oz, near highest since January, when record set

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