If you have been following the price of gold lately, you might think that the COVID-19 was a sinister plot by James Bond arch villain "Gold Finger." Spot gold prices reached a high point of $2,009.61 during trading in New York yesterday, while Comex futures settled on $2,021. "People want safety, and safety right now is gold because Treasuries are not yielding up," said one futures strategist.
Gold prices were headed sharply higher Wednesday, extending a record run for the precious metal that has helped it log four straight gains and eclipse a historical milestone above $2,000.
The yellow metal has soared about 35% in 2020, surpassing the year-to-date rally in the Nasdaq Composite Index, composed of highflying technology stocks that has led to the overall equity market rally.
Early gains for gold Wednesday put it on track for its seventh record close in eight sessions, which would represent the most record closes over such a span since April of 2011, according to Dow Jones Market Data.
Bullion’s buoyancy has been supported by central-bank monetary easing during the COVID-19 pandemic that has led to super-low interest rates in the U.S. and sub-zero rates in parts of the developed world that have helped to stoke appetite for gold, which doesn’t offer a coupon. A drop in yields for the U.S. Treasury 10-year note and recent weakness in the U.S. dollar also has buoyed the commodity, which is priced in the currency. A softer dollar makes gold comparatively less expensive to overseas buyers. “The consensus remains that gold prices are likely to continue to move higher, with new record highs likely to be set on an ongoing basis against the US dollar over the coming weeks,” wrote Michael Hewson, chief market analyst at CMC Markets, in a Wednesday research note.
On Tuesday, December gold rose $34.80, or 1.7%, at $2,055.80 an ounce, after a similar surge on Tuesday. September silver, meanwhile, gained 95 cents, or 3.6%, at $26.995 an ounce after the commodity rose 6.6% a day ago.
In other Comex metals, September copper headed 4 cents, or 1.3%, higher at $2.932 a pound. October platinum traded 2.5% higher to $979.20 an ounce, while September palladium gained 1.9% to reach $2,212.20 an ounce.