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News> Business> Content
Friday, October 12, 2018, 15:25
Gold comes alive in biggest jump since '16 after equities roiled
By Bloomberg
Friday, October 12, 2018, 15:25 By Bloomberg

A saleswoman arranges gold jewelry at a Lao Feng Xiang store in Huaibei, Anhui province. (XIE ZHENGYI / CHINA DAILY)

Gold may have finally snapped out of its inertia.

READ MORE: Despite dents, gold to glitter

On Thursday, prices posted the biggest gain since June 2016, when the UK 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 after data showing weaker-than-expected US inflation raised speculation that the Federal Reserve may slow the pace of interest rate increases.

Gold markets finally showed some life, but it took an absolute pummeling on equity markets to trigger demand 

Stephen Innes, head of Asia Pacific trading at Oanda Corp

Gold, which hit a 10-week-high of US$1,226.42 an ounce on Thursday, had held near US$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 eased 0.3 percent to US$1,220.40 by midday Asian trade, but were still poised for a second weekly advance.

“Gold markets finally showed some life, but it took an absolute pummeling on equity markets to trigger demand,” Stephen Innes, head of Asia Pacific trading at Oanda Corp in Singapore, said in a note. The softer-than-expected CPI print and risk aversion remaining front and center provided the catalyst to test significant resistance at US$1,225, he said.

A gauge of gold-mining equities tracked by Bloomberg Intelligence also had the biggest increase since 2016 on Thursday. On Friday, as shares in Asia steadied, Newcrest Mining Ltd, Australia’s largest producer, rose 3.8 percent and Zijin Mining Group Co climbed 5.1 percent in Hong Kong.

Other precious metals Silver little changed at US$14.5817/oz; heads for 2nd weekly drop Platinum steady at US$840.82/oz; set for 2nd weekly advance Palladium +0.3% to US$1,083.50/oz; +1.1% this week.

ALSO READ: Pure gold loses its luster

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