Gold climbs above $1,800 for first time since 2011 driven by demand amid coronavirus

Gold climbs above $1,800 for first time since 2011 driven by demand amid coronavirus

Gold futures rose above $1,800 an ounce for the first time in eight years as low interest rates and a resurgence in coronavirus cases drive demand for the metal as a haven.

The metal is heading for its best quarter since early 2016, benefiting from economic stimulus from the Federal Reserve and other central banks, simmering US-China trade frictions and renewed concern over economic fallout from the coronavirus. Investors also continue to pile into gold-backed exchange-traded funds, with holdings at a record.

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“The $1,800 level is a psychological hurdle,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. in Singapore. “Low interest rates, monetary policies and the coronavirus are all at play.”

Bullion for August delivery reached $1,802.80 at 11:20 a.m. on the Comex in New York, the highest for a most-active contract since November 2011. The move extends this year’s advance to 18 percent and marks a breakout from a months-long trading range.

Gold touched all-time highs in September 2011, with futures rising to $1,923.70 and spot metal advancing to $1,921.17.

New hot spots are emerging, and the World Health Organization is warning that the worst of the pandemic is still to come because of a lack of global solidarity.

Goldman Sachs Group Inc. said gold could climb to a record $2,000 an ounce over the next 12 months, while JPMorgan Chase & Co. recommended investors stick with bullion.

“The Fed is being extremely accommodative and because these shutdowns are starting to reoccur globally, more central bank measures are probably going to be initiated,” Phil Streible, chief market strategist at Blue Line Futures in Chicago, said by phone.

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Read more:

Gold rallies towards $1,800 mark as investors seek safety from coronavirus

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