Gold prices rise as global stocks sell off amid fears of a resurgence in U.S. coronavirus cases

Gold futures climbed on Thursday, supported by growing concerns of a resurgence in U.S. cases of coronavirus. A sobering economic outlook from the Federal Reserve on Wednesday and indications that the central bank will not raise interest rates at least through 2022 also helped to foster buying in bullion.

Marios Hadjikyriacos, investment analyst at XM, said that the winner of recent developments in the market has been “gold, which jumped back towards the upper bound of the range it has been trapped in for months now.”

Hadjikyriacos said that the Fed’s moves “turbocharged by the confirmation that interest rates will remain at rock bottom levels for as long as the eye can see.”

August gold
was up $13.40, or 0.8%, at $1,734.10 an ounce, after settling down less than 0.1% on Wednesday. Gold prices settled a half-hour before the Fed’s 2 p.m. policy statement and interest rate projections.

The Fed’s updated policy statement and projections indicate that it expects a 6.5% contraction by the end of the year on a year-over-year basis, with the unemployment rate ending at 9.3%, well above the Fed’s estimate of the long-run rate forecast of 4.1%.

Meanwhile, the number of U.S. coronavirus infections passed the two million mark and over 112,000 Americans have died, according to Johns Hopkins University.

Among other metals Wednesday, July silver
traded 27 cents, or 1.5%, higher at $18.06 an ounce, after finishing Wednesday’s action virtually unchanged.

July copper
shed 4 cents, or 1.4%, at $2.621 a pound, after gaining 2.2%, a day earlier and threatening to halt its winning streak at five straight gains.

July platinum
falls $1.70, or 0.2%, at $844.30 an ounce, while September palladium
gained $17, or 0.9%, to reach $1,947.80 an ounce.

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