Gold could be returning to its established role as an inflation hedge, with prices finally increasing after many weeks of treading water.
Prices have breached the $1,830 benchmark, following considerable market resistance at around $1,820 per ounce.
Gold is now trading at $1,834 per ounce, dipping marginally on Friday morning after significant increases over recent days.
The precious metal has become attractive to investors again with stocks plunging across Wall Street, alongside a broader drop on equities earlier in the week.
In particular, Nasdaq has fallen into ‘correction territory’ after plummeting 10 per cent on Wednesday.
Inflation has also risen to seven per cent in the US, which has also provided gold with an attractive tailwind.
However, prices were not growing in line with expectations due to fears of hiked interest rates from developed economies across the world.
Rupert Rowling, market analyst at Kinesis Money, said: “With gold proving popular from its age-hold role as a haven asset, its price jumped up to nearer $1,840 before falling back so far today. It will be interesting to see gold’s next step as investors continue to weigh up the contrasting factors of a declining stock market that would typically be supportive of gold versus an environment where rising interest rates are expected, which would typically be negative for the non-yield bearing gold.”
Craig Erlam, senior market analyst at OANDA, also argued gold breaching the $1,830 milestone as a key breakthrough. This could propel gold to higher prices in the coming weeks.
Commenting on the potential role for gold in the current market, he said: The move suggests gold is once again playing the role of the inflation hedge and a safe haven in these unstable markets. A lot of tightening is priced into the markets but inflation is running hot and there doesn’t appear to be much confidence that it will be enough. It’s no wonder there’s so much anxiety out there.”