By Onome Amuge
Gold is once again making a case for investors’ attention, boosted by increased concern about inflation pressures and renewed i
Gold for June delivery on New York’s Comex was up 0.4 per cent at $1902.5 an ounce while the more active Comex gold contract for August gained $6.80 to settle at $1,905.30.
Analysts said market narrative for the recent consecutive rally of the yellow metal has been mounting worries that inflation is poised to make a comeback in the global economy. This, they explained, supports gold on the basis that inflation will take root before the world’s central banks raise interest rates to stamp it out, thus leaving the precious metal to fulfil its historical role as a hedge against rising prices.
According to data from the World Gold Council, there are also signs of improving demand in China, with first quarter demand coming in at 191.1 tonnes, the highest quarterly total since 2015, up 212 per cent from the first quarter of 2020, when demand was quelled by the covid-19 pandemic. Figures presented by the council also showed a 4 per cent demand above the first quarter of 2019, indicating some real strength in China’s gold demand.
Ed Moya, analyst at OANDA, an online trading platform, said the recent fall in the U.S dollar and Treasury yields have created a rally for gold. He however noted that the true test for gold will be after the next couple of months of ‘hot’ inflation reports.
For other precious metals, silver shed 0.1 per cent to $27.82 per ounce, platinum was down 0.4 per cent to $1,174.63, while palladium gained 0.3 per cent to $2,814.20.
