Gold prices have increased to their highest in more than two months as the dollar plummeted following the Pentagon’s statement about the US military strikes on Hezbollah facilities in Syria and Iraq, Reuters reports.
On Monday, spot gold increased by 0.2 percent to $1,513.29 per ounce. The rise was preceded by gold prices hitting their highest since 25 October to amount to $1,515.80 per ounce,
Commenting on the developments, Ilya Spivak, a senior currency strategist at the financial web portal DailyFx, told Reuters that “we are looking at pre-positioning for next year and a rebalancing of portfolios ahead of year-end”.
All this is “overlaid with very low liquidity levels, that are essentially exacerbating the volatility and making these moves appear exaggerated”, he added.
Stephen Innes, a market strategist at AxiTrader, for his part insisted that from a “pure” macro and risk point of view, “it currently makes little sense for gold to be trading above $1,500/oz”.
“The surging equity market and higher gold prices seldom, if ever, exist in the same time frame and simultaneously moving higher”, he asserted.
The comments followed the South China Morning Post reporting that 2019 has been a good year for gold, which traded at a staggering 15 percent higher rate than the year before.
Innes attributed it to geopolitical uncertainty, insisting that “the main driver of the gold price this year has been lower global interest rates amid heightened geopolitical tension in Europe over Brexit, as well as the trade war between the US and China”.