Gold poised for fresh peaks after vaulting six-year high

LONDON (Reuters) – Gold looks set for further gains after rising bets on lower interest rates, a weaker dollar and confrontations between the United States and countries including China and Iran catapulted prices to six-year highs. Gold has leapt 10% in four weeks, breaking above technical resistance which has thwarted every rally for half a decade to rise above $1,400 an ounce for the first time since 2013. “The stars seem to be aligning for the gold market,” said Societe Generale analyst Robin Bhar. A U.S. Federal Reserve signal that it may cut rates as soon as next month to combat economic risks – the first reduction since 2008 — has created “a bullish tailwind for bullion”, said analysts at Citibank. Gold could rise as high as $1,500 by the end of the year, they said. Lower interest rates help gold by pushing down bond yields, reducing the opportunity cost of holding non-yielding bullion. They also tend to weaken the dollar, making dollar-priced gold more affordable for buyers with other currencies. “The only worry is maybe the Fed doesn’t go through with the rate cuts,” said Societe Generale’s Bhar. “But longer term, rates do seem to be coming down and… continue reading

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