Investors across the globe are, with caution, re-entering the market for gold, making a bet against the global economy as gold prices surged this past week to their highest level in eight months, the Economist reported.
Gold was trading at $1,200 an ounce Thursday, spurred by big sell-offs across international equity markets. The rallying of gold prices comes amid a series of concerns across these same international markets, such as falling oil prices and how it will affect emerging markets and debt concerns in the U.S. shale-oil industry.
Renewed fears of deflation stemming from falling oil prices have pushed down interest rates, which also has been good for gold, the Economist noted. On commercial bank deposits, some banks have imposed negative interest rates, which create an incentive to invest in gold.
However, global demand dropped a bit in 2015, and some, such as Goldman Sachs, expect gold will fall in 2016 for the fourth year in a row. Other estimates, however, have gold in one of its best phases in the past 150 years, Fortune reported. Gold prices retreated Friday after Thursday’s surge.
http://www.ibtimes.com/why-are-investors-returning-gold-market-2306499