Gold boosted by flight to quality

Gold is higher for the fourth day in a row as the decline in technology stocks has prompted a flight to quality.

Gold is trading at $1322, up 0.25% on the day as the selloff in technology stocks in New York last night has dragged global equity markets lower this morning, which has led to an influx of cash being invested in traditional assets like gold. While there is fear that the technology bubble is about to burst, we could see gold trade higher.

As Alastair McCaig stated on Tuesday, a standoff between Russia and the west over Ukraine is also encouraging traders to sell equities and buy safe haven products like gold. If political tensions rise again, it could drive the metal higher.

The US reporting season began this week, with JPMorgan Chase reporting weaker-than-expected earnings per share and revenue. The stock is trading lower on the back of this which may also accelerate the buying of gold.

Gold is finding support at the 50-hour moving average of $1315. The big hurdle to clear is $1334, which was the high before the selloff at the end of March.

Gold chart

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.