NEW YORK (Kitco News) -- Gold prices ended the U.S. day session solidly higher, pushed well above the key $1,100.00 mark, and hit a two-month high Thursday. China's stock market traded for only a half-hour Thursday, dropping 7%, and then circuit-breakers kicked in to halt trading for the rest of the session.
"The big issue is the equity markets - the Chinese equity market has tumbled but to understand the relationship with gold, one has to go back to 2012-2013 when we saw big move down in gold prices - this was predicated on a massive shift from gold to equity markets," Martin Mureenbeld, Chief Economist for Dundee Economics, told Kitco News Thursday.
He added, "What we are getting now is some uncertainty about the market - that has made gold interesting again; it is a play against equity markets."
Murenbeeld highlighted that the firm's average annual forecast for the metal sits around $1,175. "Given the kind of problems we see developing this year, I don't think it is going to be a good year for equity markets and China does have the potential of undermining growth in the world economy," he said.
Billionaire financier, George Soros said today that the market could be reliving 2008, Murenbeeld does not agree entirely. "Do I see a 2008? Probably not, I don't expect any financial institution on this side that is going to break down."