Gold smashes through January highs

Even with equity markets heading higher, gold’s movement in the last week has highlighted the undercurrent of uncertainty.

Gold has managed to rise just over $100 since its intraday lows at the end of December 2013 – an almost 8.5% bounce – and is now hitting levels last seen in November. At times it has been far from convincing in its efforts to regain momentum, but today’s action will be warmly received by the bulls. However, it is a close above recent highs that they are really yearning for.

Yesterday saw the China Gold Association (CGA) announce that demand for the precious metal has increased by more than 40% over the course of 2013; a total of 1176 tonnes was purchased for a combination of jewellery and bullion investment. The company’s annual report now shows that China is the world’s largest buyer of gold, taking over the long-held mantle from India. There is also a sizable quantity of the metal that is mined inside the Chinese borders, but this has not been commented on by the CGA.

We have mentioned over the last couple of weeks that a close above $1268 might be a sign that the precious metal could make a concerted effort to tackle the $1300 level; so far this seems to be playing out.

Spot gold chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts

This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.