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With investors weighing in between forecasts for the US economy featuring it slow interest rates and a decrease in physical demand, gold is running away as the winner for the second quarter in a row.
The value of gold for immediate delivery has gained for the past four weeks capped by achieving a value per ounce of $1,316.17 on Friday last week. It was trading at $1,316.59 noontime in Singapore today, extending its longest surge in three months and putting it on track for its first two quarter climb since 2011. Prices for the precious metal has increased by 9.6% so far this year.
Global unrest highlighted by violent developments in both Iraq and Ukraine had spurred gold to recover from last year’s loss in value by 28% as investors looked to take advantage of its reputation as a safe investment.
Heightened risks of inflation in the US is also believed to be playing a role in the increase, according to Australia & New Zealand Banking Group Ltd. The Federal Express says that inflation climbed by the largest gap in nearly two years to 1.8% in May compared to the year before to fall short of their 2% target.
Meanwhile, the largest exchange traded product backed by gold, the SPDR Gold Trust, maintained its holdings of 785.02 tons as of last week. Bloomberg data indicates that assets have already fallen 1.7% in 2014 with a further reduction seen this quarter.
In other metal commodities, the price of an ounce of silver continued to decrease after reaching its highest in three months last week of $21.2073. It has dropped a further 0.3% since then to $20.9062. On the other hand, an ounce of both platinum and palladium are headed for their second quarterly gain by climbing 0.3% to $1,481.25 and by 0.2% to $842.95 respectively.
