Gold surges to one-year high

Reuters

London

 

Gold vaulted more than five percent on Thursday to a one-year high, on track for its biggest daily jump in more than seven years as financial uncertainty, a lower dollar and tumbling stock prices around the world prompted investors to seek refuge in bullion.

Volume of the most-active U.S. gold futures contract surged to the highest since late-2014 as investors poured into the market. Traders cited fears of financial instability and slumping bank shares on both sides of the Atlantic. Investors grew more worried about banks' profitability in a low-growth and low-interest rate environment. U.S. Treasury yields tumbled in another safe-haven play that also bolstered demand for gold.

"The safe-haven seekers are moving back. We recommend clients add gold to their portfolios as insurance, if things turn out really bad, there will be much more upside," said Julius Baer analyst Carsten Menke.