Gold prices restored their allure on Tuesday as renewed global economic and geopolitical concerns prompted cautious investors to turn back to safer assets.
The June gold price rose to as high as $1,238 a troy ounce before trimming gains to $1,230, up 0.9%, at 11:44 a.m. in New York.
International Monetary Fund Managing Director Christine Lagarde warned on Tuesday that the global recovery remains “too slow, too fragile.”
In a speech at Frankfurt’s Goethe University, Lagarde called for stronger action by the world’s economies to boost growth.
She said the United States should raise its minimum wage, Europe should improve job training, while emerging economies should cut fuel subsidies and boost social spending.
The U.S. dollar fell on Tuesday to its weakest against the Japanese yen since October 2014. The greenback fell 0.8% against the yen and last traded at 110.40 yen.
The U.S. Dollar Index is down 5.7% since its December 2 peak of 100.51.
The benchmark U.S. 10-year Treasury yields surrendered nearly five basis points to 1.731%, their lowest since March 1.
Crude oil was little changed at $35.76 a barrel on Tuesday. It is 16% cheaper than its peak in mid-March.
Traders are waiting for the release of the minutes from the recent Federal Open Market Committee meeting.
Gold, which is considered a safe-haven asset during times of geopolitical turmoil, was also helped by rekindled fears about a British “Brexit” from the European Union and a Greek “Grexit” from the eurozone.
The uncertain global economic picture kept risk-averse investors away from stock markets on Tuesday. The Dow Jones Industrial Average, the S&P 500, and the NASDAQ Composite were down 0.5%, 0.7%, and 0.6% respectively.
The Asian trading day ended with losses in many stock markets. European shares also dropped in early deals.
Adding to gold’s appeal was weak economic data from the U.S. The February trade deficit of the world’s largest economy hit its widest gap since August, increasing to a seasonally adjusted $47.1 billion from a revised $45.9 billion in January.
In other precious metals, the May silver price added 1.1% to $15.115 a troy ounce, extending this year’s gains to 9.3%.
Platinum for April delivery increased 1.6% to $957.80 a troy ounce.
The gold price has added 18% since its 52-week low reached on December 3, primarily helped by financial volatility in China, the world’s second-largest economy, and political unrest around the globe.