Gold now best-performing commodity this year as investors seek safe haven in wake of market turmoil

 
Kathryn Gaw
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Gold is seen as a safe haven for risk-averse investors (Source: Getty)

The price of gold has risen to a 10-month high, while the Japanese yen rose by 0.5 per cent to a 14-month high of Y160.74 per pound sterling as investors react to market turmoil.

Meanwhile, demand for 10-year treasury bonds in the US has driven prices down to a one-year low of 1.673 per cent.

Gold was the big winner amid tumbling stock prices. The price of gold bullion was up by 1.5 per cent this morning and trading at $1,214.64 (£841) per ounce - its highest value since May 2015.

This represents its ninth gain in 10 days, making it the best-performing commodity of the year so far.

Gold is seen as a safe haven during times of market turmoil, and hit an all-time-high of more than $1300 per ounce in September 2010, following the 2010 'flash crash’.

Gold tends to do well when other sectors don’t perform,” says Adrian Ash, head of research at gold trading firm BullionVault. “Money managers are buying gold purely because it isn’t anything else - it isn’t debt, it isn’t equity, and it certainly isn’t cash. Gold is a form of financial insurance.”

As a result of the price bounce, mining shares are also ticking up, with shares in Zijin Mining Group up by 8.6 per cent as Hong Kong’s markets re-opened, and Australia’s Newcrest Mining up 0.4 per cent on the Sydney exchange.

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