Gold has reached a more than six-month peak rising above $1,300 as investors rushed to seek refuge in the metals after iPhone maker downgraded its revenue forecast and amid fears of a global economic slowdown.
The precious metal futures climbed in a second straight session on Thursday after US stocks saw the worst start of the year in more than a decade. Gold hit $1,300.40 an ounce on the Comex division of the New York Mercantile Exchange – the highest price since June 2018. It slightly rolled back ending the day at around $1,294.80 and remaining at the same level as of Friday opening.
“Obviously, the concerning news from Apple sales in China has created an additional wave of equity market selling, and that in turn has continued to pump money towards gold,” analysts at Zaner Precious Metals wrote as cited by Market Watch.
Apart from gold, most precious metals advanced on Thursday, except for platinum, which was down 0.6 percent trading below $800. March silver closed up 1% on Thursday settling at $15.797. Silver is believed to be more sensitive to signs of global economic weakness and has been growing since the end of December.
Palladium for March delivery hit the highest since December 19 and traded at $1,200.30 per ounce at the end of Thursday and continued to advance of Friday morning rising to $1,204.10 as of 9:20GMT.
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“This rally in gold is based on investors increasingly realizing that gold is safe money,” Rainer Michael Preiss, an executive director at Taurus Wealth Advisors said, according to Bloomberg. The demand for the precious metal was also triggered by the potential downturn in the global economy, rising US debt and possible central bank mistakes, the analyst believes.
However, some experts believe that despite the bright start to the year, gold may face great losses in 2019 as the US currency is about to strengthen.
“Gold prices are going lower,” President of Lucid Investment Tyler Jenks said in a New Years special of the Keiser Report. “I believe we can see a $600 on gold…because the dollar is going up and silver and gold have been moving inversely to the dollar.”
Thursday was one of the darkest days for US tech giant as it faced the biggest single-day stock percentage decline since 2013 after its CEO Tim Cook revealed a worse than expected revenue forecast for the first quarter of 2019, saying lower sales in China are partly to blame for it. The news sent US markets into a nosedive, with the Dow Jones Industrial Average dropping more than 660 points.
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