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5 Apr, 2023 14:07

Gold extends rally past $2,000

Bullion prices have been bolstered by weak US economic data
Gold extends rally past $2,000

Gold prices hit their highest since March 2022 on Wednesday, extending gains above $2,000 per ounce, amid safe-haven demand and disappointing US economic figures.

Spot gold was up 0.1% to $2,030 per ounce by 12:40 GMT, while US gold futures were unchanged at $2,038.10. Analysts say the precious metal will sustain gains above the $2,000 threshold due to weaker prospects for the US economy.

“The ‘third time's the charm’ for gold, having probed above the $2,000 level in both August 2020 and March 2022. This time, it appears to be able to sustain the momentum, as dark clouds gather within the economy,” independent analyst Ross Norman told Reuters.

According to him, weaker economic data has shifted the focus from “inflation-busting to saving the wider economy.”

US payroll processing firm ADP reported on Wednesday that private sector hiring decelerated in March – a sign that economic growth in the country is heading for a sharp slowdown or recession. ADP said 145,000 jobs were created last month, with the figure below the Dow Jones estimate for 210,000.

Investors have been ramping up gold-buying lately, seeking protection from the contagion affecting the US banking sector. They traditionally turn to gold in times of market uncertainty to hedge risks.

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