Business

Gold extends record rally on softer dollar, stimulus bets

By CNBC

GOLD scaled an all-time peak today (Aug 5), after topping the $2,000 mark in the previous session, spurred on by a weaker dollar, falling US Treasury yields and expectations of more stimulus measures to revive a pandemic-ravaged economy.

Spot gold was up 1% at $2,039.06 per ounce. US gold futures rose 1.7% to $2,054.30.

In Thailand after the Gold Traders Association announced its first gold price for the day in the morning with a hike of 400 baht it continued to rise and gold ornament selling price has now breached the 30,000 baht mark, INN News reported.

At 1.37 p.m. after the seventh adjustment the selling price of one baht weight gold ornament was 30,150.00 baht and buying price 29,016.24 baht.

The selling price of an equal weight of gold bars was set at 29,650.00 baht and buying price at 29,550.00 baht.

“The drop in the dollar and nominal yields, as speculation remains rife about global growth and any US fiscal package, is what fundamentally drove gold prices higher,” IG Markets analyst Kyle Rodda said.

“The outlook remains very strong for gold. Interestingly, we’ve seen traders reduce their long exposure to gold throughout this recent rally, suggesting new buyers could still come back into the market to push prices higher,” he said.

Coronavirus cases continue to surge in the United States and dozens of US states have had to pause or roll back their reopening plans. The global tally stood at more than 18.41 million.

The rise in cases has dented hopes of a swift US economic rebound, sending the 10-year Treasury yield to a five-month low, reducing the opportunity cost of holding non-interest bearing gold.

The US dollar fell 0.3% against its rivals, making gold cheaper for holders of other currencies.

White House negotiators vowed to work “around the clock” with congressional Democrats to try to reach a deal on coronavirus relief by the end of this week.

“Despite a potential short-term pull-back, the mid-to-long-term prospect for gold and other precious metals remains bullish against the backdrop of a low interest rate environment and fiscal and monetary stimulus,” said DailyFx strategist Margaret Yang.

CAPTION:

Top: A one kilo Swiss gold bar and US dollars gold coins are pictured in Paris on February 20, 2020. Photo: Joel Saget /  AFP via Getty Images and published by  CNBC

 

Nina
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