Gold eyes record high as safe-haven demand thrives

Monday,   27-Jul-2020   08:50 AM (IST)

Gold prices extended gains on Monday, just $3 shy of an all-time high, driven by U.S.-China tensions and a weaker dollar, while expectations of more stimulus to revive pandemic-hit economies lifted the metal's appeal as an inflation hedge. Spot gold was up 0.8% at $1,916.91 per ounce by 0030 GMT, was just $3.39 shy of record high hit in September 2011 at $1,920.30. U.S. gold futures rose 0.8% to $1,913.50. U.S. Secretary of State Mike Pompeo took fresh aim at China last week, saying Washington and its allies must use "more creative and assertive ways" to press the Chinese Communist Party to change its ways. The White House and Senate Republicans have reached "an agreement in principle" on the next coronavirus relief bill, a White House official said on Sunday. Gold tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency debasement. The dollar index fell 0.1% to a near two-year low against its rivals, making gold less expensive for holder of other currencies. U.S. stock futures slipped and Asian stocks were on the defensive in early Monday trade as tit-for-tat consulate closures fanned worries about further tensions between the world's two largest economies. More than 16.13 million people have been reported to be infected by the novel coronavirus globally and 644,836​ have died, according to a Reuters tally. Speculators increased their bullish positions in COMEX gold and silver contracts in the week to July 21, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. Physical gold rates flipped to a discount in India last week as local prices surged while China's discounts slipped further on weak retail demand. Silver jumped 1.3% to $23.04 per ounce, platinum rose 0.9% to $922.50 and palladium climbed 0.8% to $2,237.39.