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21 April 2024

Gold price skyrockets above $1,300 per ounce

24ct gold is currently changing hands at Dh156.75 per gram in Dubai. (Shutterstock)

By Vicky Kapur

Spot gold prices surged more than 8 per cent in early trade today to above $1,300 an ounce, soaring almost $100/oz above its 200-day moving average.

24ct gold is currently changing hands at Dh156.75 per gram in Dubai even as gold price made fresh five-month highs in the emirate and across the world this morning.

A revaluation of the Swiss franc last week has acted as the biggest shot in the arm for the yellow metal in recent weeks, along with a softer dollar. Spot gold has now appreciated from $1,142/oz in early November to above $1,302 this morning – a spike of more than 14 per cent in less than three months.

Today’s surge comes on the back of uncertainty about whether or not the European Central Bank would announce additional stimulus measures in the wake of a deteriorating regional economy.

Analysts expect the ECB to further ease money-printing to stimulate the European economy, and a good amount of the additional stimulus is bound to end up in gold investments owing to the safe-haven appeal of the metal.

Investment in the yellow metal lost its allure last year after the US announced a systematic cut-back in its quantitative easing programme, and the metal fell from $1,379 in mid-March 2014 to $1,142 in early November of the same year.

After enjoying 12 years of resurging prices, gold price saw its first annual decline in 2013, ending the year down 28.3 per cent in dollar terms, even as 2014 saw the decline stem at just -1.5 per cent for the year.

Nevertheless, 2015 so far has been a great year for gold, woth spot process surging more than 10 per cent in three weeks.

Worries over the health of the global economy have added to the demand for gold. Yesterday, the International Monetary Fund slashed its global economic growth forecast for 2015 and called on governments and central banks to pursue accommodative monetary policies and reforms.

(Image via Shutterstock)