The precious metal’s price for immediate delivery rose 2% to a new all-time high of $ 1,980.57 per troy ounce on Tuesday morning in Asia, before losing much of that gain. Gold has risen more than 30% since the start of the year, making it one of the best performing consumer assets in 2020.
Seen by investors as a safe haven in times of uncertainty, gold has jumped about 9% in the past six trading sessions as concerns have grown over the economic impact of coronavirus outbreaks in states -United.
Recent gains have come at the expense of the dollar, with investors betting that the deteriorating Covid-19 situation in the United States will lead to more economic stimulus. A weaker dollar is generally seen as bullish for gold in part because it makes the metal cheaper for international buyers.
The dollar index, which tracks the US currency against a basket of peers, edged up 0.3%, but continued to trade near its lowest levels since mid-2018.
Investors said gold’s upward momentum reflected rising expectations the Federal Reserve could signal further policy action when its rate-setting committee meets on Wednesday.
While traders doubt the Fed will turn to negative interest rates, some believe it could take more unconventional measures such as controlling the yield curve or setting upper limits on bond yields. of the Treasury.
“The Fed is likely to signal that it continues to put its finger on the trigger – that it is prepared to relax its policy further if necessary,” said Thomas Costerg, senior US economist at Pictet Wealth Management.
Others have pointed out that the coronavirus has made it more difficult to obtain physical gold, also helping to drive up prices.
“Anyone involved in the physical market would be aware that at the dealer level access, especially to gold and silver coins, has been restricted due to the virus,” said Robert Rennie, manager Global Market Strategy at Westpac.
Gold then retreated to rise 0.2% to $ 1,943.45 an ounce, but analysts predict the metal’s rise could pick up quickly.
“The uptrend of gold and the downtrend of the dollar will resume within the next 24 hours,” said Daniel Been, head of foreign exchange strategy at ANZ, noting excess dollar liquidity in the market. financial system.
Most Asian stock markets rose on Tuesday. China’s CSI 300 index of shares listed in Shanghai and Shenzhen climbed 0.7% while Hong Kong’s Hang Seng rose 0.5%. Japan’s benchmark Topix fell 0.2 percent.
Futures tipped Wall Street’s S&P 500 up 0.1% when trading begins later in the world day, after rising 0.7% overnight. London’s FTSE 100 is expected to gain 0.3%.