The dollar extended its recent slide and gold rose to a record high as investors mulled simmering Sino-American tensions, the upcoming Federal Reserve meeting and signs the virus spread in the U.S. may be slowing.
Investors continue pouring in money and bumping up demand to fuel gold rates as the coronavirus pandemic weakens confidence elsewhere. Gold prices in the national capital continued to hit new highs, rising by Rs 475 to Rs 51,946 per 10 gram on Friday, on the back of gains in the global prices of the precious metal and a rupee depreciation, according to HDFC Securities.
Spot gold prices have surged 53% in the last 14 months, blowing past 2011′s record high of $1,920.30 an ounce to an all-time peak of $1,943 earlier on Monday. In the US, investor expectations for annual inflation over the next decade, as measured by a bond-market metric known as breakevens, have moved higher the past four months after plunging in March. And the jump in gold prices seems to suggest that some investors agree with those negative forecasts - and are seeking ports in the storm to park their money.
Gold hit a record high Monday as investors rushed into the safe-haven on concerns about China-U.S. tensions, a spike in virus infections around the world and a lack of progress on a new stimulus bill in Washington. Bitcoin climbed back above $10,000.
Bullion's move came as a gauge of the dollar fell to the lowest in more than a year amid negative real rates in the US and bets that the Federal Reserve will keep policy accommodative when it meets this week.
Global stocks lost steam late last week after Washington ordered China's consulate in Houston to close, prompting Beijing to react in kind by shutting down the U.S. consulate in Chengdu. Extra unemployment benefits expire this week.
A Federal Reserve meeting will conclude on Wednesday, and while markets are not predicting any changes to rates, investors will be looking closely to see whether the central bank will enact any further stimulus measures, something which could add further strength to gold prices. "To some degree gold replaces the U.S. dollar, which typically benefits during a crisis".
IStockGold prices in the national capital continued to hit new highs, rising by Rs 475 to Rs 51,946 per 10 gram on Friday, on the back of gains in the global prices of the precious metal and a rupee depreciation, according to HDFC Securities.
It's worth remembering during the latest gold rush that Warren Buffett, the billionaire investor and CEO of insurance conglomerate Berkshire Hathaway, has long warned investors against buying gold. Gold usually fares well during times of economic uncertainty and distress.
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