By Barani Krishnan
Investing.com - Just a week ago, it was bleeding with the rest of Wall Street amid the cash crunch across markets. Now, with Congress looking poised to agree to a $2 trillion stimulus package and the Federal Reserve on stand-by for limitless quantitative easing, gold is on fire again.
Gold futures for April delivery on New York’s COMEX neared the critical $1,700 resistance on Tuesday before settling up $93.20, or 6%, at $1,660.80 per ounce. It was the second-straight day that the contract had gained 6%, adding a total of more than $176 over the past two sessions. In Tuesday’s trade, April gold futures hit s session high of $1,697.80.
Spot gold, which tracks live trades in bullion, was up $74.25, or 4.8%, at $1,627.40 by 3:42 PM ET (19:42 GMT).
“There’s just so much of stimulus money that’s headed for the markets that this was bound to happen to gold at some point,” said Eli Tesfaye, precious metals strategist at RJO Futures in Chicago.
“The important thing to note is the correction across markets, both on Wall Street and commodities, is on hold for now and that’s stopped gold from being used as piggy bank to cover losses elsewhere and allowed it to rally on its merit as a safe haven.”