Gold hits fresh seven-year high
- Gold trades at the highest level since February 2013.
- Yellow metal draws bids despite the strength in the US dollar.
- The dollar is finding love, possibly due to increased haven demand for the US government paper.
Gold is flashing green for the fourth straight day and is currently trading at $1,624, the highest level February 2013. The anti-risk yellow metal continues to draw bids from retail investors and hedge funds despite the headwinds from other markets.
Gold ignores dollar rally
Gold is currently reporting 7% gains on a year-to-date basis. Meanwhile, the dollar index, which tracks the value of the greenback against majors, has gained 3.5% so far this year.
Dollar strength usually hurts gold. This time, however, the rally in the greenback has failed to deter investors from pouring money into the yellow metal, possibly because the strength in the US dollar is likely a result of increased demand for US treasuries.
The classic haven assets like gold and treasuries have found love amid the coronavirus outbreak in China and the fears of the virus spreading to other parts of the world, leading to a sharp slowdown in global growth.
Gold's bullish momentum will likely strengthen further if the preliminary German PMIs for February, due at 08:30 GMT, miss expectations by a big margin, bolstering recession fears.
Technical levels