Gold eyes $2000 mark in speedy record-breaking run

Gold eyes $2000 mark in speedy record-breaking run

Nonetheless, gold spiked $40.60 to a record $1,938.10 per ounce in a sign that nervous investors were looking for safe havens to park their money.

Gold's spot price had been gaining steadily this year and it was only a matter of time before a historic peak would be scaled.

Earlier in the day, the August contract of gold on the MCX hit an all-time high of Rs 51,833 per 10 gram.

In the worldwide market, Comex gold was rising 0.40% to $1,904 per ounce today, while Spot gold price rose 1.5% to $1,928.83 per ounce today, after hitting an all-time high of $1,933.30.

The main driver behind gold's rally has been falling returns on U.S. government bonds, which reflect the likelihood that the Federal Reserve will have to keep interest rates lower for a prolonged period of time to support the economic recovery, according to Hussein Sayed, chief market strategist at FXTM.

Silver too joined the rally, jumping 4.5 per cent to its highest since September 2013 at $23.86 per ounce.

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Gold rose more than $30 to $1,926.20 by early afternoon in Asia.

In India, investors' focus is back on surging domestic coronavirus cases that neared 1,436,019, with total deaths standing at 32,812.

Meanwhile, covid-19 cases surged to over 16.13 million globally, driving expectations for more stimulus to stem the economic blow.

The technical outlook for the price of gold remains constructive as it trades to fresh yearly highs during every single month so far in 2020, with the bullish behavior also taking shape in July as precious metal tags a new 2020 high ($1898). "We think these factors, in combination with limited supply growth as miners continue to restrain capital spending, will drive gold prices higher", Haefele said. Silver rode on its coattails, jumping to the highest in almost seven years. Geopolitical tension between US & China and weakness in dollar supports the bullions. The greenback is considered the ultimate safe haven currency, and a lower dollar has lured investors to rush to gold to maximise returns during the pandemic.

The net-long US Dollar exposure persists even though theDXY index continues to track the downward trend from the March high (102.99), and the low interest rate environment along with the ballooning central bank balance sheets may continue to act as a backstop for the price of gold as market participants look for an alternative to fiat-currencies. Traders are again eyeing record low yields, with dimming hopes for a sharp USA growth recovery fueling expectations that the Fed is about to signal more accommodation ahead.

Financial investors, mainly in Europe and the United States, have been on an unprecedented buying spree, with gold-backed exchange-traded funds having added a record 734 tonnes worth $39.5 billion to their stockpiles in first half of 2020, according to the World Gold Council.

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