Gold Surges to Record High as Investors Seek Safe Haven

Gold Surges to Record High as Investors Seek Safe Haven

On a similar note, Silver September futures gained Rs 3,547 to trade at 64,770 per kg today, after hitting a lifetime high of Rs 64,896 earlier in today's session.

Gold prices jumped to record highs on Monday as an intensifying U.S. -China row hammered the dollar and cemented expectations that central banks would continue pumping out stimulus to ease the economic pain from a worsening coronavirus pandemic.

Gold futures have soared almost 30 percent this year to US$1,941 per ounce, beating the previous record of $1,921 in 2011, with the bullish rally kicking off earlier this month, Reuters data show.

Hopes of more government spending around the globe through major central banks have caused a surge in demand for precious metals in recent times.

Comex gold surged more than 1 percent to trade near $1,960/oz after hitting a high of $1974.7/oz, a new record.

Similarly, Silver futures too rose in overseas markets, jumping 4.5% to its highest since September 2013 at $23.86 per ounce.

Sitting at a price of Rs 52,000 per 10 gram, analysts do not see this as an end to the rally in gold prices. The narrative behind gold's surge remained the massive central banks' stimulus, growing economic uncertainty over COVID-19 and the prevalence of negative real bond yield, which continued to weigh heavily on the U.S. dollar.

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

Amid less participation of investors in broader equity indices, and more inclination towards precious commodities, many market analysts have turned bullish for the metals in the coming week.

Silver holdings with iShares ETF were unchanged for a second day at 17379.98 tonnes, a record high level. Geopolitical tension between US & China and weakness in dollar supports the bullions.

"Real concerns around the longevity of the USA dollar as a reserve currency have started to emerge", wrote a team of Goldman strategists led by Jeffrey Currie.

"This is a rare event when people are relatively bullish on the stock market while at the same time they are also being defensive by investing in gold", Anthony told the Post, adding that the US Federal Reserve's stimulus and the good performance of technology shares in the US had spillover effects on emerging stock markets, including in Indonesia.

"Investors may have become anxious that the appreciation in stock prices will not be justified in second quarter earnings, prompting them to buy gold as a hedge against market volatility", Anthony said.

"Real concerns around the longevity of the United States dollar as a reserve currency have started to emerge".

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