Spot gold rose 2.6 percent to $1,225.26 as of 2:11 p.m. EDT (1811 GMT), after hitting its highest since July 31 at $1,226.27. It was also the metal’s best one-day percentage gain since June 2016.
U.S. gold futures settled up $34.20, or 2.87 percent, at $1,227.60.
• Bullion broke above a narrow trading range it has been stuck in for the past 1-1/2 months, triggering fresh buying interest and forcing investors to cover their short positions, analysts said.
Wall Street extended its slide to a sixth session on Thursday after European stocks slumped to a 21-month low, pointing to growing risk aversion across global markets.
“A lot of people are running to gold as a safe-haven trade, diversifying into the asset and selling the dollar,” said Michael Matousek, head trader at U.S. Global Investors.
“Now that gold has broken through the strong resistance level at $1,210, a lot of new long positions are coming in.”
• Meanwhile, U.S. President Donald Trump, for a second day, criticized the Federal Reserve on Thursday, calling its interest rate increases a “ridiculous” policy that was making it more expensive for his administration to finance its growing deficits.
• “As a stock market selloff continues, gold is once again a desired destination in times of uncertainty. The metal had lost some cache in minds of investors, but when there is no clear safe haven. Funds are flowing to gold,” said Alfonso Esparza, Senior Market Analyst at OANDA.
• Holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 1.2 percent to 738.99 tonnes on Wednesday, the first gain since July and the biggest inflow since March.
Reference: Reuters
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