Gold Surges as Oil Prices Slide, US Treasuries Rebound
Gold prices surged on Thursday, rising as much as 2.8% to exceed $4,380 an ounce, after the Federal Reserve's interest-rate hike on Wednesday sparked a slump in oil prices.
The recovery in Treasuries lifted some pressure on gold, which usually performs worse when bond yields are high because it doesn’t pay interest, said Christopher Wong, a strategist at Oversea-Chinese Banking Corp.
Oil slid on Thursday due to signs that supply disruptions in the Middle East may be set to ease, with Saudi Arabia seeking to partially restore flows along a vital pipeline.
Giovanni Staunovo, strategist at UBS Group AG, expects gold to face near-term headwinds from the Fed's rate hike, but notes that rising fiscal deficits and higher debt burdens should support gold in the long term.