Gold Steadies Near 6-Month High as Other Markets Flash Red
James Bevan Says Selloff Is 'Most Definitely Not' the Start of a Bear MarketAs the equities selloff spread from Asia to Europe, gold proved its status as a safe haven.
The metal added 0.3 percent to $1,343.19 an ounce, extending yesterday’s 0.5 percent advance. FTSE/JSE Africa Gold Mining Index gained 1.7 percent, while silver and platinum also rose. But across other risk markets, screens flashed red as everything from bitcoin to Japanese stocks headed lower.
“The recent rout in equity markets should be supportive of gold, although not immediately,” John Sharma, an economist at National Australia Bank Ltd., said by email. “The muted reaction stems from the recent strong jobs numbers, which indicate increased confidence about the economy.”
Much will depend on whether the rout continues and the outlook for inflation, traders said.
“Gold may for the first time in maybe ten years be acting like an inflation trade," Darius Tabatabai, portfolio manager at London-based Arion Investment Management Ltd. “People are starting to worry about inflation a bit, and that could be good for gold.”
Gold Fields Ltd. and Anglo American Platinum Ltd. rose more than 2 percent. But more diversified companies dropped, with the Bloomberg World Mining Index sliding 1.9 percent.
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