Gold nears $1,900 on more stimulus plans
london — Gold prices climbed over one per cent to a nine-year high on Thursday, buoyed by weaker dollar and unprecedented stimulus measures to revive coronavirus-hit economies, while rise in US jobless claims underpinned fears of a slow recovery.
“It [jobless claims data] tells you that at least here in the States, we still have a long way to go before we recover,” said Edward Meir, analyst at ED&F Man Capital Markets.
Spot gold was up 1.2 per cent to $1,893.71 per ounce by 1533GMT, having hit its highest since September 2011 at $1,894.53. US gold futures rose 1.4 per cent to $1,891.10.
“Gold as store of value has significantly enhanced so it wouldn’t be a surprise if it rises to $1,900,” Bank of China International analyst Xiao Fu said.
Geopolitical risks, worries about further tensions between Washington and Beijing and ample liquidity from widespread central bank stimulus measures are driving prices, she added.
Non-yielding gold has surged nearly 22 per cent this year, bolstered by low interest rates and the wave of stimulus as economies around the world to support their battered economies.
“You have this wave of stimulus practically from every central bank in the world, everybody is putting out stimulus packages, easy money, loans, new debt and all of that is also bullish for gold,” Meir added.
Also supporting bullion, the dollar index dipped 0.2 per cent, having hit a more-than four-month low.
Elsewhere, silver fell 0.4 per cent to $22.94 per ounce, having hit a nearly seven-year high earlier in the session.
Palladium rose 0.05 per cent to $2,148.68 per ounce, while platinum gained 0.5 per cent to $925.74.
Market tightness in the second half of 2020, supported by monetary and fiscal stimulus measures, should support palladium prices over the next 12 months, UBS said in a note, adding it expected the auto catalyst metal to reach $2,500 an ounce by mid2021. —