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Gold price climbs back near $5,100 as investors buy the dip - YAHOO FINANCE
Gold (GC=F)
Gold prices rose for a second consecutive session on Wednesday as investors returned to precious metals after one of the sharpest sell-offs in decades, helped by a weaker dollar.
The precious metal had surged to a record $5,594.82 last Thursday before suffering its steepest one-day fall since 1983, dropping more than 9% on Friday. Prices then fell a further 1.9% on Monday.
Investors said the rebound reflected renewed buying after a wave of analysts in the City argued that the sell-off had been excessive and that further gains were likely.
Analysts at Jefferies said: “The path of least resistance for commodities and mining shares is still mostly higher in an environment where investors and central banks globally are actively reallocating capital en masse to real assets due to macro factors … our point? Buy the dip.”
Despite the recent volatility, gold (GC=F) remains up more than 60% over the past year.
In a note published after Monday’s rout, Joni Teves, precious metals strategist at UBS, wrote: “Is the gold rally over? Our short answer is no.”
UBS has forecast that gold (GC=F) could reach $6,200 later this year.
“After plunging from record highs amid elevated volatility, precious metals attracted renewed buying interest,” ING Bank analysts Warren Patterson and Ewa Manthey wrote in a note.
“Safe haven demand is among factors that will remain supportive of gold prices over the medium term,” they said.
