How far can it go ?
Gold on Tuesday made a dash for the crucial $1,300 an ounce level as investors seek a safe haven from turmoil on financial markets rocked by the confidence-shaking move by the Swiss central bank last week.
In heavy trade of more than 20m ounces by noon in New York, gold for delivery in February – the most active futures contract – jumped just over $20 an ounce from Monday’s close hitting a high of $1,297.20 an ounce – the highest since August 19.
It’s the eighth positive trade session in a row and the metal is now trade up over $110 or 8.7% in 2015.
Gold’s gains this year also comes into the teeth of a rampant US dollar. On Tuesday, the greenback hit fresh 12-year highs against the currencies of major US trading partners, with the dollar index topping 93.
Since August 18, the last time gold could be traded above USD 1,300 an ounce, the USD has strengthened by 12%.
Commodities priced in US dollar usually have an inverse relationship to the world’s reserve currency, particularly gold. The US dollar index record high of 164.72 reached in February 1985 coincided with the bottom in the price of gold of $284.25 an ounce during that same month.