Long before the June Brexit vote and the failed coup attempt in Turkey that took place on Friday, gold has been climbing since the beginning of the year and remains the best performing asset in the global financial system. But it is events such as these, coupled with many more taking place in Italy, Japan, and even the United States, that will keep the gold rally forging ahead and ensure that the price will rise and overtake its all-time high before the end of the year, or early into 2017.
In fact, even after six days of the gold price falling due risk on speculation in the equity markets thanks to rumors of new quantitative easing and 'helicopter money', the price shot up $10 alone in after-hours futures when word hit that a coup attempt was taking place against Turkish President Erdogan.
The Turkish lira fell to a three-week low versus the US dollar in late trading on Friday in New York due to news of the coup in Turkey, which likewise spurred safe haven bids for
US Treasury bonds, paring their earlier losses.
The Turkey lira was last down 5.0 per cent at 3.0300 lira per dollar.
“Have you seen the latest headlines on Turkey? That probably has something to do with it. This dollar surge is very much headline-driven,” said Vassili Serebriakov, currency strategist at Credit Agricole in New York.
Spot gold prices turned higher, reversing earlier losses in late trade on Friday in New York on the Turkish news. Gold was up 0.23 per cent at US$1,337.73 per ounce at 4:42 p.m. New York time (4:42 am Hong Kong on Saturday, July 16), moving off intraday lows of $1,322.
“Gold has been frog-marched $10 higher over the last hour when it became apparent that there has been an attempted coup in Turkey,” said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York. – South China Morning Post