Price of gold surges past six year lows recorded in December
BullionVault, a gold and silver bullion exchange, yesterday said that more than 300 kilos of gold was exchanged before lunchtime and added that it has had its busiest week since June 2013.
On Tuesday, ETF Securities saw its highest ever one day net inflow of $345m into its gold linked Exchange Traded Products (ETPs).
Nitesh Shah, director, commodities strategist at ETF Securities, said gold has been one of the best performing assets this year and is up 9.1% year-to-date.
“Volatile cyclical asset performance has driven investors toward the defensive asset, while a weakening US dollar has been supportive for gold’s performance in dollar terms” he added.
What else is affecting the price of gold?
What pushes up prices is never demand from jewellery consumers or coin collectors, said Adrian Ash, head of research at BullionVault. People buy gold simply “because it’s gold”.
In a world glutted with debt, equities, bank deposits and industrial commodities, that makes gold suddenly very useful to money managers and private investors needing something to do what gold has always been used for – storing value when other things fail.
He added that worsening volatility and losses are forcing money managers to reconsider their exit from gold since it peaked with the last global financial crisis in 2010-2012. See YourMoney.com’s Protecting your investments: how safe are ‘safe havens’? where we put the spotlight on gold.