Gold price within sight of $1,800 as virus cases mount
Gold prices remained stable on Monday, approaching their multi-year high reached last week as investors weigh the rise in US coronavirus cases against uncertain signs of economic improvement in some regions.
Spot gold rose 0.1% to $ 1,772.53 an ounce at 12:45 p.m. ET, still in sight of $ 1,800 an ounce – a level most recently reached in late 2011. US gold futures remain largely unchanged, trading at $ 1,781 an ounce.
“The current surge in coronavirus cases in most parts of the US has given the market momentum and supports gold,” said Bob Haberkorn, RJO Futures senior market strategist, to Reuters.
“There has been a flight to security in gold since last week … but traders are waiting to see how stocks perform, and if stocks are sold later, gold should go up,” he added.
Bullion is facing the best quarter in four years as the number of confirmed Covid-19 cases exceeds 10 million worldwide and the spread of disease in key markets such as the United States, Brazil and India is accelerating. Emerging Covid 19 clusters around the world also indicate that the pandemic is far from over, which supports the prospects for safe havens like gold.
So far, the price of the yellow metal has risen 17% this year as the Federal Reserve loosens the economy indefinitely to rejuvenate the economy. Investors have feverishly stacked up in gold-backed exchange traded funds (ETFs), with global holdings continually reaching new highs.
In a research note on Monday, Macquarie Group’s strategists, including Tom Price, remain optimistic about their prospects for the precious metal:
“The macroeconomic background continues to favor valuable engagement: falling real interest rates, central banks adopting the rate-cutting cycle worldwide, and of course general concern about the virus.”
According to analysts, the greatest upper limit for the upward trend is “perhaps the preference for cash in the event of collapsing inflation expectations”.
Meanwhile, Citigroup has raised its three-month spot price forecast to $ 1,825, maintaining its “long-term bullish trend” for 2021.
