Gold prices surged again on Tuesday to the highest in more than seven years as the World Health Organization cautioned that the worst of the coronavirus pandemic is yet to come.
Spot gold was up 0.5% to $1,780.64 per ounce by 2 p.m. EDT, after reaching $1,785.85 an ounce earlier in the session — its highest since October 2012.
US gold futures also surpassed the $1,800 per ounce mark for the first time since 2011, with bullion for August delivery rising as much as 1.3% to $1,804 an ounce, as the recent upturn in covid-19 cases drove up demand for the precious metal as a haven.
“The $1,800 level is a psychological hurdle,” Howie Lee, an economist at Oversea-Chinese Banking Corp. in Singapore, told Bloomberg. “Low interest rates, monetary policies and the coronavirus are all at play.”
Bullion is headed for its third straight month of gains and its best quarter since March 2016 as fears surrounding the covid-19 pandemic continue to mount.
So far this year, price of the yellow metal has risen by 17%, driven by economic stimulus from central banks worldwide, rising US-China trade frictions and renewed concerns over economic fallout from the pandemic including inflation.
“The big picture view, is that gold is in the middle of a regime shift from a safe-haven asset to an inflation hedge asset,” Daniel Ghali, commodity strategist at TD Securities, told Reuters.
“US yields have continued to grind lower and the result of that is that real rates are printing new lows,” which he believes has boosted the precious metal, long considered a hedge against inflation and currency debasement.
(With files from Bloomberg and Reuters)