Gold prices today are enjoying a bump from investors seeking refuge from global marke t volatility.
Equities have suffered badly. Fears of an economic slowdown in China and dramatically lower oil prices appear to be the most blameworthy signals. Global economic activity has remained weak, with the International Monetary Fund's (IMF) recent 2016 and 2017 growth forecasts being cut.
Year to date, gold prices have acted well as investors look for shelter. The gold price is up $40, or 3.8%, and that's just since the start of 2016.
As for if they will keep climbing, here's what you need to know in our latest gold price news...
Your Latest Gold Price Analysis
The real action in gold price movement started Wednesday last week. The S&P 500 gapped down again at the open that day by 32 points, and oil lost another 6% to under $27 per barrel, a chip shot away from its December 2001 low of $25.96.
That frightened global markets, poisoning sentiment in North America.
At the worst, the S&P 500 was down a massive 64 points, or 3.4%, the Dow was off a huge 539 points, or 3.4%, and the Nasdaq gave up a whopping 92 points, or 2%. Most of these losses were recuperated by the end of trading; still, the S&P 500 printed its lowest close since October 2014.
Investors quite clearly flocked to gold, which started NY trading around $1,095 and climbed relentlessly until about 12:30 p.m. That's when it peaked at an impressive $1,110 for an intraday gain of $23 from the previous close.
Gold prices settled the NY close at $1,100 for a strong finish. Even the U.S. Dollar Index rose only slightly throughout the day and failed to attract any significant buying.
Thursday, Jan. 21, saw gold begin to weaken in the early hours to trade down from $1,100 just after 8:00 a.m. to $1,093 by 11:00 a.m. But then gold shot higher, climbing to close NY trading at $1,102.
Gold prices today are up $8 to $1,106.60 an ounce.
Now let's explore some of the other developments in gold that are worth following.
What's Moving Gold Prices Today - and Tomorrow
According to Reuters, the past week saw Asian gold demand weaken thanks to rising prices ahead of the Lunar New Year holiday. But this week could see strong buying return as we approach the Chinese New Year.
Indian demand has been relatively soft thanks to a rise in gold prices caused by a weakening in the rupee since the start of the year.
Which leads me to point out an interesting gold price chart showing a specific period of time...
This is Jan. 20, when equities and oil looked particularly ugly:
There's no clearer signal that the world was buying gold that day as it sought shelter from stocks and oil. Gold was up in every single major currency.
This headline from Yahoo! Finance Canada on the same day basically sums it all up: "Gold Benefits from Falls in Equities and Commodities Markets."
Lastly, the Financial Times reported that according to the CEOs of major gold producers and Thomson Reuters GFMS research, gold production is likely to have peaked last year at 3,155 tonnes. What's more, it's now expected to drop by 3% in 2016, ending a seven-year streak of increasing output.
Kevin Dushnisky, president of Barrick Gold, said that a combination of lower production, falling ore grades, a dearth of new discoveries, and delayed development make for a positive outlook in the medium and longer terms.
All of this is shaping up to make for an interesting year in gold. Stay tuned.
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