Gold rebounds after trading at lowest level in more than two years
Gold futures climbed on Friday, after a report on U.S. consumer sentiment showed that inflation has slowed, but prices were poised to end the week with a more than 2% loss, a day after settling at their lowest in over two years.
“It seems that this is largely the story that will play out over the course of H2 2022, given rising rates and a strong dollar,” he wrote. “In fact, while our high scenario is not written off, it would clearly take a big risk off event to change the tide. The fact that gold has not really performed incrementally well even when equities have sold off recently tells us that the perceived haven role is not driving gold at the moment.
Gold prices on Friday, however, moved higher shortly after a report from the University of Michigan showed that U.S. consumer sentiment rose to 59.5 in September and hit a five-month high. It also revealed that inflation has slowed a bit in the past few months. Ash said he saw “shades of the 2013 gold crash” in this week’s drop. Nine years ago, gold “tested its post-financial crisis floor of $1,535 four times before cracking lower,” leading to a 15% two-day plunge in spot prices, with the metal losing 25% inside three months and posting its worst annual loss since 1981, he said.
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