Shrugging off firmness in USD and mild increase in bond yields, gold staged the strongest rally in 2 months as investors again found its safe-haven status appealing. Risk aversion soared with the VIX climbed +1.34% to 25.73 after surging +13.5% a day ago.
USD strengthened against major currencies including Japanese yen amid intervention speculations. Treasuries plunged on profit-taking as bond yields have moved the extremely low levels. With investors staying away from risky assets while 'safe' assets reaching overbought territories, there left few investment options and gave rise for gold's price rally.
Copper nudged higher along with Asian equities, aided by a softer U.S. dollar, although trading was lacklustre with few investors convinced there was incentive to push prices up. Gold touched a four-week high, extending gains from the previous day as investors bought the precious metal and shied away from riskier assets on concern about the health of the global economy. Oil rebounded above $76 a barrel on bargain hunting, recovering from the steepest three-day decline since mid-May after support at $75 held.
