Gold prices have jumped more than 10% since the start of April amid a weaker dollar and falling bond yields

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  • Gold prices have risen more than 10% since the start of April to near $1900 per ounce.
  • OANDA’s Sophie Griffiths says the rise is a result of “falling Treasury yields and a softer tone surrounding the greenback.”
  • “Speculative financial investors are also betting increasingly on rising gold prices,” according to Commerzbank.
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Gold prices have jumped more than 10% since the start of April to nearly $1,900 per ounce. Since the start of May alone, gold is up roughly 7%.

According to Sophie Griffiths, a market analyst for the FX solutions provider OANDA, the rise in prices is a result of “falling Treasury yields and a softer tone surrounding the greenback.”

Griffiths also said that a recent cryptocurrency sell-off could have pushed investors toward gold amid inflation concerns.

According to Cameron Brandt, the Director of Research at EPFR, an Informa Financial Intelligence business, flows into gold hit 19-week highs in the third week of May as well.

A new research report from Commerzbank also shows gold ETFs tracked by Bloomberg have registered almost continuous inflows for the last 2.5 weeks.

Daniel Briesemann, a precious and industrial metals analyst at Commerzbank, said in the new report that “speculative financial investors are also betting increasingly on rising gold prices.”

Traders have expanded their net long positions in gold for the third week in a row and net longs are now 82% higher than they were at the start of May, according to data from the report.

Briesemann said that he believes there is still “upside potential” in the gold market due to the Fed’s insistence on maintaining “ultra-expansionary monetary policy.”

He also said gold could see support from increased Chinese government buying throughout this week.

Despite the recent rise in gold prices, the precious metal still trades below where it did nearly a decade ago in September of 2012. Since the end of 2018, however, Gold is up roughly 40%.

Gold isn’t the only precious metal on the move, either.

Copper prices are up some 87% over the past year. The commodity has made a slight retreat over the past two weeks, but experts are still calling it the new oil and making predictions for the price to hit $15,000 per ton by 2025.

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Gold prices are at a 3-month high relative to bitcoin as the Fed continues monetary-stimulus efforts

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  • Spot gold rose to $1,853.12 an ounce on Monday, the highest point since February 10.
  • Gold’s price relative to bitcoin is now at a three-month high as the cryptocurrency sells off.
  • Investors are flocking to gold amid fears of rising inflation and a weakening dollar from the Fed’s stimulus efforts.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Gold prices rose to a three-month high Monday morning as investors have flocked to the safe-haven asset amid continued Federal Reserve stimulus that’s weakened the dollar.

Spot gold rose 0.5% to $1,853.12 an ounce on Monday, reaching the highest point since February 10, according to Bloomberg. The price movement came as bitcoin sank to nearly $42,000 after Elon Musk suggested Tesla may sell its holdings.

The ratio of gold’s price relative to bitcoin is up to the highest point since early February. One Bitcoin is now equivalent to about 23 ounces of gold bullion, down from a record of 36 ounces in April, according to Bloomberg data.

It’s likely that many investors may be buying gold as an alternative to a weakening dollar. The Federal Reserve has promised to keep interest rates near zero for the foreseeable future, which could weaken the US currency and strengthen the case for gold.

Gold has also been historically viewed as a hedge against inflation, and Wall Street has grown increasingly concerned that inflation will overheat as the US emerges out of the pandemic.

Cryptocurrency bulls argue that bitcoin’s fixed supply makes it an even better hedge against inflation than Gold, but recent price movements in both assets question this narrative.

Last week, when key inflation data came in significantly higher than expected, bitcoin fell 7% in one day, moving in the exact opposite direction as one would expect an inflation hedge to move. Bitcoin experts say they’re not concerned about day-to-day movements in the historically volatile cryptocurrency’s price.

Read more: UBS says to buy these 42 ‘new momentum’ stocks that are poised to outperform in a rising inflation environment

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