The gold price continues to climb today, racking up its 4th straight day of gains which started last Wednesday after a dovish speech from the US Federal Reserve.
At 6.00pm (GMT) gold was trading at $1,234 up from $1,228 at close of trade on Friday.
The precious metal has been on a winning streak ever since last week’s speech by Fed President Janet Yellen, who noted that although she expected more rate hikes this year, the scenario is not a done deal, and any moves would be data dependent.
The news left investors in doubt as to how many rate hikes would be forthcoming this year, with a minimum of 3 expected before Yellen’s speech.
This left investor bailing out of the US dollar and into safer haven assets such as gold, and according to some analysts the rally may not be over. Nitesh Shah, director, economist and commodity strategist at ETF Securities noted,
We expect gold to rise to US$1300 by mid-year, before declining back to current levels by year-end. A dovish Fed will be met by inflation surprises over the coming quarter, which will lead to further decline in real interest rates. Although we agree with consensus that the Fed will deliver only two further rate hikes this year, Fed members may be forced to talk tougher in the second half of the year, which could tighten yields and lead to a stronger US dollar. For now, a dovish Fed is likely to support gold.
Further supporting the gold price today was British Prime Minister Theresa May’s decision to announce the triggering of article 50 next Wednesday which will finally start the process of Britain leaving the European union.
The news was welcomed by investors and traders alike, who have for month’s been fretting over a hard Brexit, and this may go some way to alleviate their fears.