GOLD CONTINUES TO SOAR IN VALUE

Gold prices just climbed up for the third consecutive week, with spot gold increasing by 0.1% to about $1225.75 per ounce. This can be seen as a 0.7% increase in the last week.

The volatility of the stock market and cryptocurrency in general seem to be largely responsible for the bullion’s rapid growth in the market. Gold’s gains are often subject to how well the equity market is performing. A global stock sell-off spurred many investors to turn to gold, increasing its price to a 2 ½ month high, worth around $1233.3 this week.

Once the equity market regained momentum earlier this Friday, the bullion’s gains began to stagnate. The dollar index fell by 0.2 percent, a contrast against a higher value it experienced a few weeks earlier.

The dollar it seems, also has a role to play in the rapidly fluctuating value of gold. This observation was noted by David Megers, director of metals trading at High Ridge Futures. As its positioning in the fiat market grew weaker, gold’s position climbed higher. The price of gold is quoted in dollars and is seen by both investors and central banks as a hedge against geopolitical unrest.

The Hungarian Government’s Surprising Announcement

The Hungarian government announced on October 16^th its decision to increase gold reserves from 3.1 tonnes to 31.5 tonnes. Many analysts describe this as a strategic move driven by political ambition to reassert Hungary’s independence in Central Europe, this comes at a time when both Hungary and Brussels are locking horns over a sensitive subject matter.

More investors are now lining up to bolster their holdings of precious metals. This was observed when SPDR Gold Trust, the world’s largest exchange traded fund based purely on gold, increased its share of it by 2.5 percent two weeks earlier.

Other Precious Metals Also Follow Suit

Last week’s rapid growth in value of precious metals was not specific to gold. Silver went up by 0.3% to a $14.6 per ounce. Platinum soared by 0.7% to $831.6 per every ounce, although its trajectory is on a decline of 0.6 percent. Palladium also increased by 0.9% to be valued at around $1080.25, gaining momentum after falling for two consecutive weeks prior to its recovery.

Indian Festivities Increase Gold’s Price

The biggest market for gold is China, followed closely by India. Recent festivities in the subcontinent have also swung the tide in the bullion’s favor as both investors and consumers alike flock to local markets in pursuit of the yellow bar. The Indian market seems to be on the receiving end of bloated prices due to the Indian rupee’s relatively weak position.

This does not deter consumers from splashing money on acquiring gold, the direct consequence of which has caused gold futures to climb up by 10%. This is the highest growth ever documented since July 2016. In the weeks that will follow, gold prices will remain firmer against the uncertainty that looms around the volatile stock market.

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This article was written by Gold Rate.