GOLD SURGES TO ONE YEAR HIGH ON FINANCIAL UNCERTAINTY; U.S. JOBLESS CLAIMS FALL BACK
A wave of financial instability and a weak dollar has investors returning to Gold as a safe haven. The yellow metal was able to gain 4 percent, its highest peak in the last 12 months. U.S. Federal Reserve Chair Janet Yellen had a cautious tone while speaking before the House of Representatives on Wednesday morning and acknowledged a weakened economy is tightening the financial conditions faster than expected. Yellen warned if the weak conditions continue to persist it could change the outlook for the U.S. economy. "We have a good explanation for Gold's rally; it is to do with worries about the U.S. economy and the rest of the world," Macquarie analyst Matthew Turner said. "Investors are concerned that central banks' solution (is) negative interest rates or at least not raising rates, and that is Gold friendly. The key risk to Gold is that the U.S. economy manages to put in a good performance, like it did last year."
Claims for new unemployment benefits fell more than expected last week amidst turmoil in the economy. Claims have held below the 300,000 mark for 49 straight weeks. Economists had forecast claims at 281,000 while the number dropped to a post-recession low. Fed Chair Yellen spotlighted the labor market growth but maintained the tightening financial markets posed risks to the domestic economy. While the data was good news for the labor market, it had little effect on the U.S. financial markets as investors continue to watch oil prices.
At 4:04 P.M. (ET), the APMEX Precious Metals spot prices were:
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