Gold soars into bull market as global growth fears mount
Szu Ping Chan
Telegraph.co.uk
4 MARCH 2016
Gold is back in a bull market for the first time since 2013 as concerns about global growth rise.
Gold spot prices climbed to $1,272.77 an ounce on Friday, after settling at $1,264.25 on the previous day.
Thursday’s close marks a 20pc gain from the most recent low of $1,052.94 in December, meeting the typical definition of a bull market.
Signs that US growth is slowing and an expectation that the Federal Reserve will delay further interest rate rises have pushed up prices of gold since the start of the year.
Analysts said prices could climb further on fears that commercial banks may start to pass on negative rates to customers, which would see them charging people for holding their deposits.
The European Central Bank is widely expected to slash its deposit rate deeper into negative territory next week. The ECB’s current deposit rate – which went negative in 2014 – stands at -0.3pc. It is intended to penalise lenders for parking money with the central bank and encourage them to start lending.
“The risk that increasingly negative rates push banks to start charging customers for deposits would have a greater positive impact on gold, particularly if concerns build up that further lower rates could start to affect household savers,” said Joni Teves, an economist at UBS.
The Rest…HERE
