Home Business NewsBusiness Gold closes in on sterling high, but is it time to buy?

Gold closes in on sterling high, but is it time to buy?

by LLB Reporter
25th Jan 23 10:42 am

Gold prices have climbed to £1,576, just shy of £1,580 record high in sterling.

In dollar terms, gold is climbing back towards $2,000, and has risen around 15% since the end of September.

Laith Khalaf, head of investment analysis at AJ Bell, comments: “Gold is closing in on a record sterling high, rising to £1,576 an ounce, just shy of its peak level of £1,580, reached in March of 2022. Gold has been rising sharply in dollar terms in the last few months too, but still sits 6% lower than its peak level of August 2020.

“A weakening dollar, the reopening of China, and a slowing global economy have all helped propel the precious metal upwards in recent months. It’s likely that gold has received a bit of a nudge from short term traders too, as a ‘golden cross’ has appeared on the technical charts. This happens when a short-term moving average of prices, usually 50 days, rises above a long-term moving average, usually 200 days (see chart below). Gold has just experienced one of these graphical epiphanies, and a golden cross is often used by technical traders as a buying signal.

“If you’re thinking to yourself that the intersection of two lines on a chart isn’t an entirely compelling reason to buy into an asset in the real world, then you have an excellent point. There are some more fundamental factors at play which are also giving gold bugs cause for optimism, but rising interest rates on cash and bonds present a pretty significant fly in the ointment.”

Leave a Comment

You may also like


Sign up to our daily news alerts

[ms-form id=1]