BY ONOME AMUGE
Gold surged to its first weekly rise to record its strongest performance since the last week of March, buoyed by a weakened dollar and recession fears arising from a wavering global economy.
Spot gold was up 0.2 percent higher at $1,845.67 per ounce, after climbing about 1.9 percent in the previous session, while U.S. gold futures gained 0.1 percent to $1,842.70.
For the week, gold gained about 1.8 percent, recovering from 3-1/2-month lows posted earlier in the week.
Meanwhile, the U.S. dollar, which had hitherto yielded positive results, headed for its worst week since early February, with a global equities gauge set for its longest weekly losing streak on record amid investor worries about slowing growth and high inflation.
Analysts noted that the recent drawback in the dollar’s value strengthened investors’ demand for gold as the yellow metal is considered a safe haven in times of economic turmoil.
Xiao Fu, head of commodities markets strategy at Bank of China International, remarked that recession fears have grown more recently, with the volatility in equity markets leading to more interest in gold.
Fu added that a stronger-than-expected U.S. jobless claims data has also underlined the risks to economic growth.
In a note to Business A.M., Craig Erlam, senior market analyst at OANDA, observed that the trepidation in financial markets, which has shifted slightly from the pace of monetary tightening to recession risks, has lent support to gold.
“So rather than higher yields and a stronger dollar weighing on the yellow metal, we’ve seen investors pouring into safe havens which have lowered yields slightly and lifted gold,” he stated.
Erlam asserts that gold could see its fortunes improve further depending on how real and significant the economic fears become.
For other precious metals, silver was up 0.5 percent to $22.01 per ounce, gaining 4.4 percent for the week. Platinum added 0.2 percent to $964.71 per ounce, while palladium shed 0.3 percent to $2,0001.57 per ounce.