Home Markets Gold jumps 1.8%, silver rallies nearly 7% in shadow of recession

Gold jumps 1.8%, silver rallies nearly 7% in shadow of recession

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Gold jumps 1.8%, silver rallies nearly 7% in shadow of recession

Gold rebounded with gains that led to a more than three-week high today, as an unexpected drop in US GDP combined with a more dovish tone from the Fed yesterday appeared to underline the precious metal’s safe-haven status.

Specifically, the gold contract for August delivery ended trading at $1,750.3 an ounce, up $31.2, or 1.8%.

Silver fared even better, rallying strongly by 6.8% to $19.88.

The U.S. economy today showed signs of a slowdown that the market had feared, with the country’s GDP falling 0.9% in the second quarter, while analysts had expected a slight 0.5% gain.

At the same time, traders now expect the Fed to follow softer moves in raising its interest rates from now on, which activated buyers in gold, as Phillip Streible of Blue Line Future points out.

It is recalled that higher interest rates work competitively for gold, which does not offer a fixed return.

According to Michael Matousek of US Global Investors, inflation is not going to end with another Fed hike, and given the bearish trend in gold, its price is now at an attractive level that represents an opportunity for investors looking to diversify their portfolio their.

In other metals, platinum rose slightly by 0.2% to $878.8, palladium rose more than 4% to $2,088, and copper gained 1.3% to $3,478 a pound.

Source: Capital

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