By Bryan Wong
Investing.com - Gold was up on Thursday morning in Asia, continuing to hover near all-time highs boosted by a dollar that is at two-year lows, still-low interest rates and a raging pandemic.
Gold futures climbed 0.19% to $1,957.25 by 10:30 PM ET (3:30 AM GMT), getting close to the high water mark of $1,960.00 it hit onTuesday morning.
The U.S. Dollar Index that tracks the greenback against a basket of currencies was at 93.365, around two-year lows.
At the same time, interest rates and bond yields remain very low. The U.S. Federal Reserve kept its benchmark rate near zero this week and expects to keep it at that rate at least until the pandemic subsides.
“I can’t think of anything more supportive of gold than the trifecta of longer, lower interest rates and the pandemic headlines,” George Gero, of RBC Wealth Management, told Bloomberg. “the low interest rates will give you a benign dollar and a benign dollar is very helpful to gold prices because it makes it much more affordable globally.”
Goldman Sachs (NYSE:GS) has forecast that the rally in gold could continue and expects the yellow metal to hit $2,300.
Gold is also getting support from the lack of progress in the U.S. on negotiations for another COVID-19 stimulus package. President Donald Trump dismissed Wednesday Democratic demands for aid to cash-strapped cities. Parts of the existing support expire tomorrow.
“If Congress fails to dedicate financial assistance to state and local governments, it will force deep cuts to the very programs workers and families need to get back on their feet,” said Tara Lee, spokeswoman for Washington Governor Jay Inslee.
And concerns over the prospects for an economic recovery, already exacerbated by a worsening pandemic, are also a factor.
The number of cases globally is almost 17 million, with 4.4 million cases and more than 150,000 deaths in the U.S. alone, according to Johns Hopkins University data. China, South Korea, and Japan have also seen upticks of confirmed cases.
Worsening U.S.-China relations have also pushed investors towards gold. U.S. Secretary of State Mike Pompeo’s key China policy adviser, Miles Yu, had his name chiselled out of a monument at a school he attended in southwest China, according to a video shared on social media.