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Gold prices surged over 2,5 percent to their highest in a month last Thursday after the US Federal Reserve announced a massive stimulus to combat the economic toll of the coronavirus pandemic.
Spot gold jumped 2,5 percent to $1 686,85 per ounce, having earlier hit its highest since March 9 at $1 690,03. It has risen about 4,2 percent so far this week. US gold futures settled 4,1 percent higher at $1 752,80.
“The Fed unveiled yet another howitzer from its arsenal offering substantial relief to small and medium sized businesses as well as municipalities,” said Tai Wong, head of base and precious metals derivatives trading at BMO.
“Gold’s rallying because this monetary largesse will eventually have to be repaid and that payment may come as sudden higher inflation somewhere down the road.”
The Fed rolled out a broad, $2.3 trillion effort to bolster local governments and small and mid-sized businesses to keep the US economy intact as the country battles the coronavirus pandemic. —Reuters.
Data showed the number of Americans seeking unemployment benefits in the last three weeks has blown past 15 million, with weekly new claims topping 6 million for the second straight time last week as the pandemic has abruptly grounded the country to halt.
Online Reporter