Gold Has Become Interesting Again as China and World Markets are Shaky - Chief Economist

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 percent, 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 moves down in gold prices – this was predicated on a massive shift from gold to equity markets,’ said Martin Mureenbeld, Chief Economist for Dundee Economics. 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 added 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 in an interview with Kitco News. February Comex gold was last up $16.40 at $1,108.30 an ounce. March Comex silver was last up $0.119 at $14.095