Upward gold trend continues

GOLD rose to $1390 per ounce yesterday, continuing a strong upward trend that has been in play since late April this year. Analysts say the rally in gold has been driven by a handful of factors which include:
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Staff Reporter

• Escalating geopolitical tensions in the Middle East, with two oil tankers attacked in the Gulf of Oman last week.
 
• Expectations of monetary easing by the US Federal Reserve. Despite the Fed leaving the cash rate on hold in a target range of 2.25 to 2.5% overnight on June 20, markets are still betting on a rate cut as soon as July. PIMCO, the world's largest bond fund manager, has suggested the Fed may cut rates by 0.50% if "tensions between the US and China are not at least scaled down before or during the G20 meeting" on June 28 and 29.
 
• A continued plunge in global bond yields, with US 10-year bond yields now sitting below 2%. Since late 2018, the market value of debt trading with a negative yield has almost doubled and currently sits at approximately $12 trillion, according to Financial Times report this week.

 

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