Equity markets key driver for gold price jump
Riding high on global equity crash and unprecedented buying frenzy that yellow metal is witnessing overseas, gold price hit a one-year high here on Monday.
Mumbai/New York: Riding high on global equity crash and unprecedented buying frenzy that yellow metal is witnessing overseas, gold price hit a one-year high here on Monday.
“We are seeing non-stop buying from the investment community and little selling of note,” a trader told Reuters, adding that exchange-traded funds and other investment funds were moving into gold as a safe haven.
In Mumbai, standard gold (99.5 purity) shot-up by Rs 345 to end at Rs 27,775 per 10 grams from last Friday’s closing level of Rs 27,430 — the level not seen since February 3, 2015.
The key driver for the jump in gold prices today, according to experts, is the slide in equity markets across the world.
Gold price moves typically inversely to equities and dollar. On Monday, the Sensex plunged by 330 points to 24,287.42 on bearish European cues. Later, US markets, technology-heavy Nasdaq Compos-ite and Dow Jones industrial average, fell three per cent — the lowest since October 2014.
Investors have also been worried about the unraveling of rich valuations in a narrow group of stocks that led the market higher through most of 2015.
“Equities are in a ‘go-nowhere-fast’ mode, with a downward bias in the near term,” said Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis.