Gold price leaps past $1,200 on safe haven buying

26.3.2015, 19:28 -

Source: RT on YouTube
Amid nervousness on US bond and equity markets which are back in negative territory for the year and a spike in oil prices sparked by chaos in the Middle East gold leaped past the psychologically important $1,200 an ounce level on Thursday.
Gold for delivery in June – the most active futures contract – gained $21.76 or 1.8% hitting a high of $1,219.76 early on, before pulling back in early afternoon trade in New York to around $1,206 an ounce, still a three-week high.
The gold price is up more than 6% after dropping to a 2015 low of $1,148.20 an ounce last week and has now retraced almost 40% of its losses since the 2015 high above $1,300 reached in January.
Nervous investors piled into gold following a second day of sharp gains for the oil price to above $50 a barrel after top producer Saudi-Arabia launched airstrikes in Yemen against Iranian-backed militias that have taken over large swathes of the country.
With Egypt being drawn into the conflict on the Arabian Peninsula, the prospects for another protracted ground war in the region becomes more likely.

Gold also received support from a weaker dollar in early trade, but the greenback reversed course later in the day to within shouting distance of fresh 12-year highs. Gold and the dollar usually move in opposite directions.
The US Dollar Index is up 21% compared to this time last year and the past year has been the greenback’s strongest run on a rolling 12-month period since 1973.
A new report by the World Gold Council that examines the complex relationship between the gold price and the world’s reserve currency showed gold prices rise twice as much during weak dollar periods than they fall when the dollar strengthens.
Given that many analysts believe the dollar rally may be entering the final stretch, gyrations in the value of the currency could set up the gold price for a period of substantial upside.
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