By Barani Krishnan
Investing.com - Gold has little in its path to making continuous highs in $1,700 territory as inflation fears over epic government spending to fight the Covid-19 pandemic push more hedge seekers toward the safe haven.
The dollar’s continued slide was also a factor driving the yellow metal higher. The dollar index, which measures the greenback against a basket of six currencies, hit a two-week low of 98.40.
“There is very little to feel safe about in the world at this moment and that’s really drawing people toward gold as a haven,” said Eli Tesfaye, senior market strategist for precious metals at RJO Futures in Chicago.
“On top of that, you have this massive, massive stimulus and other U.S. spending to try and get on top of this pandemic, and all that is debasing currencies and providing a further pop to gold.”
Gold futures for June delivery on New York’s COMEX settled up $11.90, or 0.7%, at $1,756.70 per ounce. It earlier scaled $1,788.75, the highest for a front-month gold futures on COMEX since October 2012, when it reached $1,794.80.
Spot gold, which tracks live trades in bullion, was up $10.73, or 0.6%, at $1,724.78 by 3:09 PM ET (19:09 GMT). The session high for bullion was $1,747.66.
With Tuesday's settlement, gold prices have gained as much as $165 an ounce, or 10%, since the end of March in a rally that’s seen few stops.
Since last week, gold’s run-up was heightened by the Federal Reserve’s announcement of $2.3 trillion in additional aid for Covid-19 impact, including a pledge to provide support to risky corners of financial markets that have been hardest hit by fallout from the pandemic. The Fed support came as U.S. jobless claims surged for a third-straight week, rising by 6.6 million to bring to about 17 million jobs lost in just three weeks.
More investors took refuge in gold this week on uncertainty over when to reopen the U.S. economy from lockdown imposed over the pandemic.
President Donald Trump has been at odds in recent days with U.S. state governors and city mayors on when to bring Americans back to work. White House Economic Adviser Larry Kudlow told Fox Business on Tuesday that Trump was expected to make “some very important announcements” in a day or two related to the reopening of the economy, even as governors like New York’s Andrew Cuomo said what happens in their states was their prerogative.