You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App
Join our mailing list to receive top business news every weekday morning.

Gold edges closer to $1 800 as virus cases surpass 10m

Demand for safe haven assets surges.
Image: Bloomberg

Gold futures edged closer toward $1 800 an ounce — a level last seen at the end of 2011 — as demand for haven assets surged amid concerns over rising coronavirus infections.

Bullion is heading for its best quarter since 2016 as deaths surpassed 500 000 worldwide and confirmed cases exceeded 10 million, according to Johns Hopkins University data. The increasing numbers are a chilling reminder that the deadliest pandemic of the modern era is stronger than ever.

The precious metal has rallied 17% this year as governments and central banks implemented stimulus measures to aid economies battered by the pandemic. Investors are increasingly turning to gold as a store of wealth, and banks including Goldman Sachs Group now forecast it’ll hit a record $2 000 an ounce in 12 months.

“Gold is benefiting from the growing concern that the Covid-19 has been badly underestimated,” said Gavin Wendt, senior resource analyst at MineLife. “Gold is also benefiting from the trillions of dollars of stimulus that is being fed into the economy by central banks and the likelihood of negative real interest rates in the US It’s a double-whammy that’s enormously supportive for gold prices that will likely push them to record highs.”

Gold futures rose as much as 0.6% to $1 790.40 an ounce on the Comex, and traded at $1 784.50 at 9:46 a.m. in Singapore. Futures — which touched a record $1 923.70 in September 2011 — climbed to within $5 of $1 800 last week.

Investors are piling into bullion-backed exchange-traded funds, with global holdings at an all-time high.

This week could bring fresh cues for markets. On Tuesday, Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin are scheduled to testify before the House Financial Services Committee. The US jobs report for June on Thursday may continue data-collection issues from May that appear to understate the true scale of joblessness.

Among other main precious metals, spot silver climbed 0.4%, platinum gained 0.5% and palladium added 0.6%.

© 2020 Bloomberg

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.


You must be signed in to comment.



Insider GOLD
ONLY R63pm

Moneyweb's premium subscription is a membership service which will give you access to a number of tools to take charge of your investments.
Choose a yearly subscription at R630pa - SAVE R126

Get instant access to all our tools and content. Monthly subscription can be cancelled at any time.

Follow us:

Search Articles:Advanced Search
Click a Company: