Why gold and uranium prices are surging right now

Gold tumbled this week after new U.S. economic data bolstered expectations that the Federal Reserve will be slow to lower interest rates.

Spot bullion had a volatile week as investors analysed the data, before trading down 0.14 per cent at US$2,159 an ounce as of 12 p.m. in Toronto. Gold hit an all-time high of $2,195.15 last Friday.

The shift to lower interest rates is broadly expected to be bullish for gold as the precious metal will become comparatively more attractive compared to bonds, which are currently generating high yields because of high central bank rates.

But that shift won’t happen until central banks cut lending rates, which they’re reluctant to do until they see more proof inflation is heading back toward 2 per cent.