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Gold surges through US$1,150 as the dollar retreats

Published: 16:34 04 Feb 2016 GMT

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Gold surged through the US$1,150 mark as the dollar gave ground on concerns that the US Federal Reserve’s tightening may have run its course already.

Against a basket of other currencies, the greenback has now shed 4% since the start of the month.

Gold and the US currency traditionally move counter to each other and the dollar sliding has given more impetus to what is already a good story this year far.

Commerzbank said weak US economic data had helped gold rise above the technically important 200-day moving average, sparking technical follow-up buying.

“The ISM non-manufacturing index in the US fell surprisingly sharply in January, suggesting that the weakness in the industrial sector may now be spilling over to the previously robust service sector,” said the broker.

Gold-backed exchange traded fund also had another good day with another 10 tons flowing in yesterday.

The spot price has now risen by more than 8.5% since the start of the year, with demand helped by the advent of the Chinese New Year.

The pattern is similar to the last three years where the gold price has risen strongly at this time only to drift off after the Lunar New Year festival.

A few hours after Wall Street opened spot gold was US$11 higher at US$1,154. Silver was 19 cents higher at US$14.83 while platinum added US$19 to US$897.

Major share moves

Randgold Resources up 155p to 5,265p

Fresnillo up 40p at 763p

Anglo American up 53p at 326p

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