by Adrian Ash
Gold prices held near 2-week highs in London on Thursday, trading at $1335 per ounce as world stock markets rose sharply following the US Federal Reserve’s “no change” decision on interest rates but a new United Nations report warned of a “third phase” in the global financial crisis, with a crash in emerging markets threatening to follow the Eurozone debt crisis of five years ago and the banking crash of 2008.
Commodities gained for a sixth session running while silver extended the move in gold prices, spiking within 2 cents per ounce of $20 – a two-year high when first reached in July.
Government bond prices also rose across the board, pushing 10-year US Treasury yields down to 2-week lows at 1.64% and dropping benchmark Brazilian debt yields to just over 12% per annum.
“Gold will really be interesting when people stop asking what the Fed is going to do and begin asking, who is the Fed and what can they know?” said Jim Grant of the Grant’s Interest Rate Observer newsletter to CNBC overnight.
Recommending a “reduction of risk profile” in client portfolios for the coming 3 months, French investment bank and bullion market maker Societe Generale maintains its fourth-quarter average gold price forecast of $1350 per ounce, predicting a rise to $1375 in Q1 2017.
Each calendar quarter of 2016 has so far added $75 to the average gold price, by far the most consistent rate of change on modern records.
A repeat in Q4 would take the next 3 months’ average price to $1411.