Gold futures closed sharply higher Tuesday, with the yellow metal finishing at its highest level in more than two years as skittish investors sought out haven assets.
December gold GCZ6, -0.07% gained $13, or 1%, to settle at $1,372.60 an ounce, after notching a modest 0.2% rise Monday. The metal booked its highest close since March 2014, according to FactSet data based on the most active contract.
Concerns about ineffective measures by central banks to prop up flailing economies in Japan and Europe, and renewed expectations that a rate increase by the Federal Reserve is unlikely soon, have piqued interest in precious metals.
“Gold is accepting the fact monetary policies aren’t working,” said Ira Epstein, managing director at Chicago-based commodity broker Linn Group.
Australia’s central bank cut interest rates on Tuesday and the Bank of England is widely expected to follow suit Thursday in an effort to mitigate the fallout of the U.K.’s decision to leave the European Union.
And Japan approved a government stimulus package Tuesday that includes ¥7.5 trillion ($73 billion) in new spending.
The rally comes ahead of the closely watched July employment report due Friday, which could help determine the path for dollar-priced commodities. The Fed, which has been relatively dovish, will look at the jobs report to gauge whether the economy is healthy enough to consider resuming a normalization of monetary policy.
In theory, rising rates should deliver a jolt to the buck and make commodities priced in dollars more expensive to buyers using other currencies.
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