Gold and silver prices rise to $US10,000 on global market
Gold and Silver prices have risen by more than 20 per cent since the beginning of the year, hitting their highest levels in more than six years on Tuesday.
The rally is driven by a global market in which demand for precious metals is expanding.
The benchmark US dollar index has climbed to 1,988.21 US cents, up 6.2 per cent on the day, while gold and silver are up almost 30 per cent, according to the Stockholm-based FTSE 100 index.
The S&P 500 index is up 4.7 per cent and the Dow Jones Industrial Average is up 1.2 percent.
The Chinese government is also boosting its benchmark yuan as the yuan gains more traction amid Beijing’s efforts to push exports to global markets.
But the outlook for gold prices is bleak.
The US dollar fell to a three-week low of 113.20 US cents on Monday and its recent rally has prompted investors to cut their gold holdings.
The gold market has been hit by an ongoing supply glut that has left some investors unable to buy gold.
The government on Monday said it had reduced gold imports from the United States, Canada, Australia and Japan, and would be raising import duties on the metals.
China’s central bank is expected to announce a series of measures in coming days to support the market, including cutting import duties and imposing new capital controls on the world’s largest exporter.
But some investors are still holding out hope that China will be more flexible than the US.
Some gold investors have been waiting for a major announcement from the Chinese government to see whether it will loosen restrictions on the precious metals and if gold prices can rebound.
But even if the Chinese are willing to loosen their grip on the market some are still expecting China to maintain restrictions on gold imports, and this has sparked a surge in demand.
“I would say gold is more resilient than gold,” said Mr Kwon, who is also a Gold Investor.
The price of gold is also expected to rise to US$US10k by the end of the day on Tuesday, but this would be the lowest price in more 50 years, according the London-based Bullion Markets and Investment Group.
“There is still a long way to go before we are back at the $US3,000 level, and it is possible that we are not there yet,” Mr Kwan said.