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Gold Prices Today Hit 3-Month Highs – Here's Where They're Headed

Gold prices today (Wednesday) rose to three-month highs after a weaker than expected U.S. ISM non-manufacturing report had investors piling into gold.

Just before noon Wednesday, spot gold was trading up $10, or 0.89%, at $1,140.00 an ounce.

Data from the Institute for Supply Management showed U.S. service-sector growth slowed more than forecast in January. And Wednesday's read was the lowest for the sector since February 2014.

Gold prices todayThe report sent U.S. markets lower. The Dow, S&P 500, and Nasdaq slumped 0.74%, 1.18%, and 1.51%, respectively, just after the data was released Wednesday. The 10-year Treasury yield also sank to a one-year low of 1.827%.

Gold prices today were also climbing after European bank shares dropped to multiyear lows.

"So many of these [bank stocks] are falling so sharply," Raoul Pal, formerly of Goldman Sachs and founder of the Global Macro Investor, told CNBC Tuesday. "I think people haven't even caught up with what is going on, and that really concerns me. I look at the big long-term share charts of them, and I think this looks very terrifying indeed. I have not seen anything like this for a long time."

A third catalyst for gold prices today was uninspiring news out of China.

China set its economic growth projection range at 6.5% to 7% this year. That's the slowest rate in 25 years. And efforts to curb overcapacity are expected to raise unemployment in some provinces. Keeping unemployment low is a top policy priority for China's stability-fixated government.

Xu Shaoshi, chairman of China's National Development and Reform Commission, said in a Wednesday news briefing that downward pressure on the world's second-largest economy would persist in 2016.

All three of those factors caused the price of gold to climb Wednesday, and according to Money Morning Resource Investing Specialist Peter Krauth, gold prices will only continue climbing in 2016…

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