https://www.engineeringnews.co.za

Gold gets ignored as global equity rout fails to fire up havens

11th October 2018

By: Bloomberg

  

Font size: - +

SINGAPORE – Equities are plummeting, President Donald Trump says the Federal Reserve’s gone ‘loco’ and the trade war’s heating up, yet traditional havens in times of trouble such as gold are not getting any love.

The biggest selloff in equities since February rolled through Asia and into Europe on Thursday, triggering steep losses in benchmark share indexes, but gold has barely stirred, while other havens from US Treasuries to the Japanese yen and the Swiss franc showed only limited fluctuations.

“Prices haven’t quite had the safe-haven bid many investors would have expected, though they have bounced from below $1 185 an ounce earlier in the week,” said Jordan Eliseo, chief economist at ABC Bullion in Sydney, referring to the precious metal. “Cash seems to be the only place to hide, though gold may well find a stronger bid if this correction in risk assets persists.”

Trump said in a telephone interview on Fox News late Wednesday night the market plunge wasn’t because of his trade conflict with China: “That wasn’t it. The problem I have is with the Fed,” he said. “The Fed is going wild. They’re raising interest rates and it’s ridiculous.”

Bullion has dropped about 8% this year, and in September capped a sixth month of declines, the worst run since 1997. The retreat has been driven by a rising dollar, Fed rate hikes, and a sell-off in holdings in exchange-traded funds. While global trade tensions haven’t provided a boost, prices have steadied at about $1 200 in the past two months.

Spot gold eked out a 0.3% gain to $1 198.83 by 10 a.m. in London, after rising 0.4% a day earlier when shares first tanked. The yields on 10-year Treasuries were little changed, while the Japanese yen and Swiss franc held mostly steady against the dollar.

Gold’s failure to react to significant market fluctuations and escalating trade war concerns has been in focus. The metal’s been a “massive disappointment” as a haven this year, David Govett, head of precious metals at Marex Spectron, said in August, while Newmont Mining Corp. Chief Executive Officer Gary Goldberg said last month that bullion is “numb” to news.

Edited by Bloomberg

Comments

Showroom

Weir Minerals Africa and Middle East
Weir Minerals Africa and Middle East

Weir Minerals Europe, Middle East and Africa is a global supplier of excellent minerals solutions, including pumps, valves, hydrocyclones,...

VISIT SHOWROOM 
Schauenburg SmartMine IoT
Schauenburg SmartMine IoT

SmartMine IoT has been developed with the mining industry in mind, to provides our customers with powerful business intelligence and data modelling...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.063 0.114s - 156pq - 2rq
Subscribe Now