Investing.com - Gold prices soared to the highest level since June in North America trade on Monday, as retreating oil prices and steep declines in global equity markets underpinned demand for assets perceived as safer.
Gold for April delivery on the Comex division of the New York Mercantile Exchange jumped to an intraday peak of $1,192.30 a troy ounce, a level not seen since June 22, before falling back to $1,190.50 by 14:40GMT, or 9:40AM ET, up $32.60, or 2.76%.
Market sentiment took a hit as oil prices reversed earlier gains amid doubts over the likelihood of a deal between OPEC and on-OPEC producers to cut output happening anytime soon.
Wall Street opened sharply lower, with Dow losing more than 250 points. In Europe, markets sank to their lowest level since October 2014, as concerns surrounding global growth and weak oil prices continued to grip markets.
Gold is often seen as an alternative currency in times of global economic uncertainty and a refuge from financial risk.
Meanwhile, investors continued to digest the release of a mixed U.S. employment report for January on Friday. The U.S. Department of Labor reported that average hourly earnings rose 0.5% last month and were up 2.5% on a year-over-year basis.
However, the economy created 151,000 jobs last month, the lowest number since September and less than the 190,000 forecast by economists’. Despite the slowdown in jobs growth the unemployment rate fell to 4.9%, the lowest level since February 2008.
In the week ahead, investors will be looking to Wednesday’s testimony by Fed Chair Janet Yellen and Friday’s data on U.S. retail sales for further indications on the strength of the world’s largest economy.
Prices of the precious metal are up almost 12% so far this year as safe-haven demand has been boosted amid a global stock market rout and worries over the health of the global economy.