Gold starts 2018 on the up as investors eye US rate hikes
Gold is opening the new year on the front foot. Bullion advanced for an eighth day to head for the longest stretch of gains since mid-2011, building on an annual surge.
Bullion for immediate delivery advanced 0.7pc to $1,312.03 at one stage yesterday in London, according to Bloomberg generic pricing. Last year, the commodity climbed 14pc, the best performance in seven years. Gold's strong 2017 run came even as US stock markets surged to records and the Federal Reserve increased interest rates three times amid signs of an improving economy. Fed policy makers are projecting another three hikes in 2018, while other central banks around the world have also shifted toward a tighter monetary stance, with the European Central Bank planning to halve its asset purchases starting this month.
"As global complacency over the trajectory of US rates continues to be astoundingly low, precious metals in general should continue to benefit," Jeffrey Halley, senior market analyst at Oanda Corp said in a note. "The old adage that the market can stay irrational longer then you can stay solvent appears to be alive and well in the gold market at the moment."
Information investors will scrutinise this week for clues on the direction of monetary policy includes minutes of the US Federal Open Market Committee's December meeting, due today. (Bloomberg)