Gold price breaks 6-year downtrend
On Tuesday, the return of the safe haven buyer and a weaker US dollar combined to lift the metal to its highest level since the election of Donald Trump on November 8.
Gold futures in New York for delivery in August, the most active contract, touched a high of $1,298.80, up more than 1% in heavy volume of more than 24m ounces. Gold is up 12.8% so far in 2017.
Gold’s recovery – up $80 an ounce in less than a month – was given fresh impetus by disappointing US jobs numbers released on Friday that hurt the US dollar and clouded the outlook for GDP growth in the world’s largest economy. The weaker than expected data also put equity markets on edge which have been trading at record levels.
Mounting geopolitical worries including upcoming elections and terrorist attacks in the UK and an escalating row between Saudi Arabia and the tiny state of Qatar drawing in the US and regional powers provided further buying momentum.
This chart shows gold finally breaking a downtrend in place since the metal hit a peak above $1,900 an ounce in August 2011. In 2016 gold attempted to break through this resistance level on several occasions, but failed.