Gold surges to new record, blows past $2,000 per ounce

Image of IG Client Sentiment

Gold's scorching rally gathered more force, with prices driven higher into record territory above $2,000 an ounce as investors assessed prospects of more stimulus to combat the coronavirus pandemic's fallout, another slide in USA real yields and increased geopolitical risks. "Safe haven demand primarily reflected global growth concerns linked to rising Covid-19 cases around the world and escalating US-China tensions".

Large-cap gold miners have also seen their share prices run up over the last month, with Newmont Mining Corp, Barrick Gold and Newcrest Mining all up.

"The rally is understandable given that investors are looking for a broader range of risk-mitigating assets now that yields on government bonds are so low", El-Erian said.

RBC Capital Markets, an arm of the Royal Bank of Canada, prior today lifted its high-case conjecture for gold to $3060/oz by the primary quarter of one year from now because of taking off interest for the metal which serves as a save money Gold Price Of Almost.

Ben Seager-Scott of Tilney, a fund shop, said: "Gold acts nearly like a pseudo-currency, except no central bank can print unlimited amounts of it and devalue it". "It's all about the debasement of the dollar". Senate Democratic leader Chuck Schumer said Tuesday stimulus talks with the White House are finally moving in the right direction but they remain far apart on some issues.

Spot gold may retreat into a range of $1,943-$1,954 per ounce as it failed again to break a resistance at $1,982, said Reuters technical analyst Wang Tao.

Gold fell from a document as US and European equities rose on constructive economic information and the dollar climbed.

"The treasury market is strongly signalling that this lower interest rate environment is here to stay".

Spot gold surged 11 percent in July, the biggest monthly gain since 2012, as investors weighed a weaker dollar and record low United States real yields.

The Bloomberg Dollar Spot Index slipped 0.5 per cent. Wall Street stocks were cautiously advancing around 1645 GMT with the Dow up 0.4 percent as traders digested reports claiming recent progress towards a deal in Washington. US equity futures rose too, indicating a firm open for Wall Street, while MSCI's broadest index of Asia Pacific shares outside of Japan rose 0.7% to a 6-1/2 month peak.

The Commerce Department said factory orders rose 6.2 per cent, boosted by a surge in demand for motor vehicles.

The common currency last traded up 0.1% at $1.1815.