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Gold hits six-year high as investors run for safety

Gold hit a six-year high today as impending central bank rat..

Gold hit a six-year high today as impending central bank rate cuts and fears about the world economy sends investors running towards “safe-haven” assets.

Read more: Stocks rally as hopes grow of Fed interest rate cut

Bullion rose above $1,450 (£1,160) per ounce today, its highest price since mid-2013. Gold has climbed over six per cent in the last month and over 12 per cent in the last year.

However, gold slipped back this morning to stand at around $1,440 by 1pm UK time.

One major factor has been hints from the US Federal Reserve that it will slash interest rates, which the markets think it is near-certain to do this month.

Lower interest rates are likely to cause inflation as borrowing and spending increase, while investment in the US and in dollar-backed assets become less attractive, sending investors elsewhere.

John Williams, vice chairman of the Feds rate-setting committee, laid out the case for rate cuts yesterday, saying: “Its better to take preventative measures than to wait for disaster to unfold.”

Another factor has been the recent slowdown afflicting the global economy. Growth in the Eurozone has been anaemic and is slowing in the UK. The US-China tariff wars have seen global trade suffer.

In these circumstances investors have sold shares and moved towards less volatile assets such as gold and government bonds.

Konstantinos Anthis, head of research at financial services firm ADSS, said: “Obviously the yellow metal is benefiting from the decline in the greenbacks valRead More


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