Gold prices are higher, hit a four-week high and have pushed above what was psychological resistance at the $1,200.00 level Thursday. Several factors are working in favor of the gold market bulls, including safe-haven demand and the slumping U.S. dollar. April Comex gold was last up $13.10 at $1,210.00 an ounce. May Comex silver was last up $0.18 at $17.18 an ounce.
Asian and European stock markets sold off overnight and U.S. stock indexes are under pressure early Thursday morning, amid a “risk-off” attitude in the world market place.
The solid losses in U.S. equities on Wednesday, following a downbeat durable goods orders report, prompted some of the weakness in stock markets in Asia and Europe. Also, Saudi Arabia and its allies’ air strikes against Iran-backed rebels in Yemen have produced fresh geopolitical tension. Saudi Arabia and Iran, the two major Arab powers in the Middle East, are now in a stare-down.
The military action in Yemen was not expected. Crude oil prices rallied sharply to a two-week high above $52.00 a barrel on the news, while safe-haven gold did the same.
Reports overnight said China has moved to allow more companies to import gold into China, which will effectively reduce the premium China’s domestic gold-buyers have had to pay over the world price. The move by Chinese authorities should give a modest boost to gold demand coming from China. The World Gold Council said Chinese demand for imported gold is likely to rise by 11% this year.
The other key “outside market” on Thursday morning finds the U.S. dollar index lower again. The dollar index bulls have faded badly the past week and there are early technical clues of a market top in the index. The weakening greenback has been a bullish underlying factor for the precious metals markets.
via Kitco