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Gold Price Rises, Despite Equity Rebound, as Dollar Softens

Gold futures rose suddenly, taking their cue from a weakening dollar even as global stocks appeared set to rebound from their worst weekly rout in two years.

Gold is often pegged to dollars, tend to rise when the buck weakens because a falling dollar can make buying those assets cheaper for those using weaker monetary units.

KEY TAKEAWAYS:

  • Gold futures rose even as global stocks appear set to rebound
  • Gold tends to rise when the dollar weakens
  • Stability on global stock markets will be a positive thing for Gold

Last week “traders booked profits in gold long positions to meet margin money calls on equity investments. Gold fell as a result,” said Chintan Karnani, chief market analyst at Insignia Consultants.

“Stability on global stock markets will be positive for gold,” he said. “Investors will hedge in gold to counter stock market volatility whenever there is less need for margin calls on stock market investment.”

Original Source: https://www.marketwatch.com/story/gold-rises-despite-equity-rebound-as-dollar-softens-2018-02-12

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