Gold price to highest level in four weeks

Gold prices rose to their highest level in four weeks today as investors become more concerned about the strength of the economic recovery. At the highest point, the Gold price at €977.51 and $1,236.70 per troy ounce. After a bad September, the gold price finally seems to be getting back on its feet, driven by various reports about the weak recovery of the economy. The latest report from the IMF states that the economy is particularly weak in the Eurozone, a message that is confirmed by disappointing data on the German economy.

Investors seem to be anticipating more bad news, as the rise in the price of gold is accompanied by a fall in stock prices. The oil price also seems to be falling further and further due to a combination of falling demand and increasing supply.

Previously, a good jobs data caused a decline in the gold price and a stronger dollar, but now we are seeing a reverse movement. Still, according to analyst Abhishek ChinChalkar of India's AnandRathi Commodities, we shouldn't get too positive on gold. He spoke to Bloomberg The expectation is that the rise in the gold price will be limited to $1,250 per troy ounce, if the oil price comes under further pressure.

Lower economic growth boosts gold price

Gold prices reached their lowest level this year on October 6, when the price dropped to $1,183 per troy ounce. Around that level, the yellow precious metal also bottomed out at the end of last year. Industrial precious metals such as silver and palladium are also on the rise again this week. On the one hand, this is remarkable, because with a lower growth forecast for the economy, you would also expect a falling demand for these metals. Still, investors also see silver, platinum and palladium as something of a safe haven in uncertain times.

As a result of the rising gold price, the demand for gold ETFs is also increasing. According to figures from Bloomberg, the total stock of gold in ETFs rose by 3.7 tonnes yesterday to 1,666 tonnes. It is a bandage for the bleeding for the exchange-traded funds, because last week their combined supply of the yellow metal fell to the lowest level in five years.