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Gold rallies more than 1%
On Thursday, gold jumped over 1%, thus getting back to the psychologically crucial mark of $1,200 because a rout in global stock markets underpinned worries over soaring bond gains, speeding down global growth, not to mention trade clashes.
December delivery gold futures jumped by 1.16% on the Comex exchange being worth $1,207.30. On Wednesday, the yellow metal had concluded at $1,189.30.
Safe haven demand for gold was underpinned against the backdrop of abrupt dives in global stock markets because market participants dumped risky assets.
Evidently, the selloff was provoked by a combination of fears over the impact of soaring bond gains as well as fears that trade clashes are starting affecting the global economy.
American equities pointed to a steeply lower start, just a day after the greatest dive on Wall Street for more than eight months.
The dives took place notwithstanding a soar in American Treasuries. The revenue on the benchmark 10-year note, moving in the opposite direction to price, headed north because market participants required safety from the global equities sell-off.
The previous week Treasury gains started soaring in the face of hopes for a faster than anticipated pace of rate lifts from the Fed because the US economy seems to be firm enough.
Gold got an extra boost from a soaring greenback, with the USD index, diving 0.39% to a one-and-a-half week dip of 94.86.
A slipping greenback is capable of making dollar-denominated assets, including the yellow metal, more affordable to purchasers who hold other currencies.
Hopes for soaring interest rates will most probably remain a headwind for the yellow metal. Interest rate hikes as well as higher American bond gains dampen appeal for the most popular precious commodity that doesn’t offer yields.
December delivery silver futures rallied by 0.59% hitting $14.41 a troy ounce.
Canada’s retail sales will be out on October 21 at 15:30 MT time. Get ready with us for this event!
The market is resilient ahead of the speeches of Fed’s Powell and ECB President Lagarde, but there are still interesting movements.
The uncertainty over US fiscal stimulus and Brexit, and also rising new virus cases deteriorated the market mood. That’s why we can expect the further rally of the US dollar and the fall of riskier assets today.