Gold Snaps Back to Bull Market as Prices Surge on Haven Demand
Bloomberg - Mar 03, 2016
Gold cruised to a bull market, heedless of rebounding stock markets, as traders expect central banks to curb yields on other investments in an effort to spur economic growth.
The metal has climbed more than 20 percent from a December low, the common definition of a bull market. Gold futures advanced 1 percent to settle at $1,270.70 an ounce at 1:43 p.m. on Comex in New York. Prices rose after a U.S. report Friday showed average hourly earnings posted the first monthly drop in more than a year, even as employers added more workers in February than projected.
“The rally has mainly been on the repricing and changing expectations regarding central bank policy,†Jens Pedersen, a Danske Bank A/S analyst in Copenhagen, said by phone. The European Central Bank and Bank of Japan may ease policy further, while the U.S. Federal Reserve could postpone any further rate increases, he said.
Looser policy and the lower rates on securities that tend to follow add to the appeal of gold, which yields nothing. The metal is also a haven in times of crisis and slow growth. Trading in Comex futures was more than double the 100-day average for this time, according to data compiled by Bloomberg.
