The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Gold is trading at $1262, up 0.2% on the day after the World Bank lowered its economic outlook for 2014, cutting the growth rate to 2.8% from 3.2%. This week has been quiet in terms of newsflow, and last week’s European Central Bank interest rate cut and US jobs report have left traders wondering what to focus on.
Equity markets have enjoyed a good run recently, however dealers are now taking their cash out of stocks and moving them into gold. The downgrade by the World Bank has accelerated the rally in gold, and Alastair McCaig noted the precious metal had already been in demand over the past few trading sessions.
Global equity markets are edging away from their recent highs, and a lack of positive news could lead to a growing risk-off strategy which could benefit gold. As Alastair McCaig stated, gold is receiving support at $1240 and the flight to quality effect could push it towards $1287.