Gold pushed past the $1,800 mark yesterday, as bulls controlled the precious metal’s surge to spur its prices to new nine-year high.
The real-time barometer for bullion prices showed that spot gold was up 0.8%, to trade at $1,811 by 6.20 am Nigerian time.
In addition, gold bulls had their momentum boosted as data showed that the world’s biggest economy had added a million cases of COVID-19 infections in just 30 days, while nations spared of the virus’ onslaught like Sweden, recorded surging death rates.
“Gold is roaring higher as a number of uncertainties to the outlook persist and as the dollar slides,” said Ed Moya at New York-based online trading platform OANDA.
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“The Fed has acknowledged that corporate bond-buying could slow if market conditions improve further. But the intensifying wave of the virus in the U.S. will likely see that not happen anytime soon,” Moya said, reinforcing expectations that the central bank’s support for the American economy and markets will continue, weighing on the dollar and boosting gold.
Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics, explained the fundamentals on gold. He said:
“But other gold buyers are looking through the run of robust US data thinking that mid-June was a sweet spot in the high-frequency metrics, and things will go downhill from here due to COVID-19 resurgence and particularly as investors anticipate further policy stimulus.
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“Specifically, gold still appeared to gain traction on carryover buying from comments made by regional Fed Presidents Bostic and Daly the previous day, cautioning that the economy may be plateauing.
“We could see some profit-taking set in, but with the dollar turning weaker overnight, we could see an enduring bid hold in around $1805 as the primary motivator for higher gold prices is concerns around the COVID-19.”