Investing.com - Gold prices surged to a one-year peak in North America trade on Thursday, on bets the Federal Reserve could be done raising interest rates and as retreating oil prices and losses in global equity markets underpinned demand for assets perceived as safer.
Gold for April delivery on the Comex division of the New York Mercantile Exchange rose to an intraday peak of $1,241.90 a troy ounce, a level not seen since February 2015, before falling back to trade at $1,234.40 by 13:40GMT, or 8:40AM ET, up $39.80, or 3.33%.
Federal Reserve Chair Janet Yellen said Wednesday that financial conditions have become less supportive to growth as foreign developments pose risks to the economic outlook, but also maintained that moderate growth at home would justify "gradual adjustments" to the Fed's monetary policy stance.
A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
Gold futures have been well-supported in recent weeks amid indications global economic and financial headwinds could make it tough for the Fed to raise interest rates as much as it would like this year. Market participants have all but priced out any rate hikes this year, while the Fed is anticipating four more.
Yellen is scheduled to appear before the Senate Banking Committee at 15:00GMT, or 10:00AM ET, Thursday.
Prices of the precious metal are up almost 17% so far this year as investors seek safe havens in the face of mounting instability in other financial markets.
Wall Street pointed to heavy losses at the open on Thursday, joining a global market selloff, as investors shunned risk and crude extended losses.
European stocks slumped to the lowest level since October 2013, while Hong Kong’s Hang Seng Index fell in its worst start to a lunar new year since 1994 as trading resumed for the first time this week.
Meanwhile, U.S. oil futures tumbled below the $27-level to flirt with the lowest level in almost 13 years, as record crude inventories at the Cushing delivery hub underlined concerns over a supply glut.
The gloom pervading markets bolstered the allure of safe haven assets, such as the Japanese yen and government debt.
The greenback crashed to a fresh 15-month low against the yen, with USD/JPY hit lows of 111.00, while U.S., German and U.K. sovereign bond prices surged, as anxiety over slowing growth, weak oil prices and tighter credit markets spurred a flight to safety.