The losing streak in the equity market has had a positive impact on the price of gold which is trading at $1383, up 0.5%. Investors bought the precious metal after global equities lost ground, due to the law suit being brought against the European Central Bank (ECB) over their bond buying scheme. Gold is considered to be a quality investment as it is one of the oldest tools around; if dealers are ever concerned about the equity market they often buy gold.
Gold has remained below the $1400 level since last week’s non-farm payrolls report, when the US revealed that its level of unemployment increased to 7.6%. The price of gold collapsed as traders believed that the Federal Reserve would keep their stimulus in place, which could provide a boost to the equity market. Since last week’s US jobs data, gold has recovered some of its losses but not quiet all.
Developments in Greece could push the price of gold higher as the Greek stock market just became the only developed country to be lowered to emerging market status by MSCI.