Gold Opens Week At Record High
Investing.com
Published Aug 02, 2020 10:21PM ET
By Bryan Wong
Investing.com- Gold prices were up on Monday morning in Asia, reaching a record high and continuing its march towards the $2,000 mark.
Gold futures climbed by 0.20% to $1,977.80 by 10:23 PM ET (3:23 AM GMT).
Gold has been powered by persistently low interest rates, a dollar at two-year lows and uncertainties about whether the U.S. Congress will be able to pass a new COVID stimulus bill.
The U.S. Federal Reserve’s Federal Open Market Committee announced last week that interest rates will be held steady near zero for the foreseeable future as the country is still a long way from recovering from the COVID-19 pandemic. Low interest rates are supportive of gold, which pays no interest or dividends, by making it more attractive to investors.
The U.S. dollar was up on Monday morning, but remains weak and the weakness is favorable for gold.
The lack of progress in the U.S. towards a new COVID bill is also worrying investors, lowering their risk appetite and driving them towards the safe-haven yellow metal. According to Senate Minority Leader Chuck Schumer, talks on Saturday were productive, but “not close yet”.
Analysts have pointed to the stimulus bill as a big factor as to whether gold will continue its march towards the $2,000 mark.
“For gold, it will depend on how much stimulus is passed. If they start to wind down the stimulus, then there is a real possibility that gold softens a bit. If they ramp it up and continue to print up money, then gold should move higher,” RJO Futures senior commodities broker Daniel Pavilonis told Kitco.
The gold contract rolled over on August 2 to the October contract.
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