Gold consolidates after a blistering rally
A weekly market summary for gold, Feb 24-29
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GOLD extended its climb to new highs this week but stopped short of the US$1,700 an ounce psychological level. Spot gold touched a high of US$1,689.56 before retracing. Gold had been in consolidation and moving in a sideways pattern since.
Investors had rushed into gold as a safe-haven asset on concerns that the Covid-19 virus would derail global growth. Markets moved on fears that business activity in major economies would shrink as global supply chains are disrupted. The outbreak has worsened in many countries outside of China, which could lead to more accommodative monetary policy. A loose monetary policy is bullish for gold. The US dollar had fallen together with Treasury yields and equity prices, all movements which are supportive of gold. Such a investing environment has enhanced gold's attributes as a perennial safe-haven asset.
What should investors look out for in the longer term?
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