Gold Prices Jump Again
San Francisco (Jan 7) Gold prices extended their streak of gains in 2016 to four in row on Thursday as investors seek havens in the global stock swoon.
Investors bidding up prices for gold carried prices up 1.3% to $1,105 an ounce in recent trading, a two and 1/2-month high. Prices for the yellow metal have risen each day this week set against a backdrop of global worries, which were amplified by People’s Bank of China move to guide Yuan currency fix rate lower by 0.5%, the steepest since last August’s surprise devaluation.
The PBOC’s move to devalue the currency at once stokes worries that growth in the world’s second-largest economy is more sluggish than feared and that other Asian countries will retaliate with devaluations of their own to keep exports competitive. See Randall Forsyth’s “By Devaluing the Yuan, China Escalates the Currency Wars,” from August.
This week’s swell higher for gold prices bodes well from a chart-watching perspective.
What about the Fed? Gold was restrained in 2015 by a strong dollar, which was buoyed by expectations for the Federal Reserve’s first increase to short-term rates. The World Gold Council, the industry group that sponsors the SPDR Gold Trust exchange-traded fund (GLD), says that the Fed-related impact on gold prices could lessen in 2016: