Gold Bounces Back

Video Length: 00:02:26

Today’s hot topic is all about the Gold rush!

Gold surged $30 on Friday, that’s a massive 2.6% rise.

Bullion was the best performing metal last month, appreciating 9%.

Are we seeing the comeback of Gold?

Let’s find out what’s going on.

Last Friday’s NFP release saw new job creation well short of the expected 191 thousand to just 151 thousand.

However, we also got a multi-year low for unemployment at 4.9% and a rise in average hourly earnings delivering a mixed bag of employment data out of the US

These figures have investors questioning further Fed hike rates especially for next March.

How did gold respond? We saw an initial rise in spot gold after the jobs report, then a session low to $1145 an ounce, but by Saturday it rose to a new high of $1165 – up 0.8%, the highest it’s been since last October.

Here’s the link between gold and US jobs data. Essentially, improved jobs means a greater likelihood of another rate hike by the Fed in March.

And as gold is a non-interest bearing asset and priced in US dollars, it becomes less attractive if US interest rates rise.

The shaky global economy is also working in gold’s favour, with the precious metal bucking the commodities down trend, and gaining almost 10% since the start of this year.

On another front, we know gold is a safe haven, and geopolitical tensions rose with the launch of a missile in North Korea on Sunday.

What’s coming up for gold?

Retreating equity markets

Slowing Chinese economy

Geopolitical tensions in the Korean peninsula

Uncertainty over future rate hikes by the Fed

And global economy recovery hiccups.

All these factors have been gathering momentum lately and all paint a rose picture for the shiny metal and its investors.

With more and more analysts turning bullish for gold and predicting prices rising above $1200, where do you stand? Is this the beginning of the gold come-back?