After all the turbulence caused by the oversupply of oil in the market, gold extends its gains hitting the new three-month high in the North America trade. This is despite the released data showing the fall of the U.S. durable goods orders and despite the economy’s underlying health concerns.
Reports shows on Thursday, January 28, that “the U.S. Commerce Department said durable goods orders, including transportation items, tumbled 5.1% last month, compared to forecasts for a decline of 0.6%. Core durable goods orders, excluding volatile transportation items, fell 1.2%, disappointing expectations for a drop of 0.1%”. Reports, at the same time, are showing that “the orders for core capital goods, a key barometer of private-sector business investment, plunged 4.3%, far worse than expectations for a decline of 0.2%, while shipment of core capital goods, a category used to calculate quarterly economic growth, dipped 0.2%”.
Despite these data, gold continued to rise on the Comex division of the New York Mercantile Exchange during their February delivery. Data revealed a $1,125.70 high a troy ounce which is the most since November 3. Prices of precious metals, especially gold, are used as an alternative currency in times wherein uncertainties occur in the global economic market and, in which, leads closer to financial risks. Today, prices of precious metals are up to 5% in the midst of the chaos in the global equity markets.
It is forecasted that 25% of a rate increase in the Fed’s March meeting will likely to occur as traders are expecting one more rate hike this year. Most likely, it will happen around July. Gold, as one of the precious metals, will not be affected by this gradual increase in the interest rates as one of the alternative currencies.
Along with gold, silver futures for March delivery is also reported high at 6.4 cents, or 44%, to trade at $14.39 a troy ounce during morning hours in New York, according to investing.com’s Thursday’s issue. Prices jumped to $14.58 which is listed highest since December 7 of last year.