Gold Hits Impressive 7-Year High Amid Bleak Forecast On Pandemic

Gold futures ended Monday at over seven-year peaks as a bleak outlook on coronavirus spreading helped investor demand for haven metal, even as U.S. benchmark stock indices climbed hoping that deaths from the coronavirus would soon plateau.

On Sunday, the U.S. Surgeon General Jerome Adams said this will be the toughest and saddest week in the lives of most Americans. He told Fox News Sunday that "this will be our Pearl Harbor week, our 9/11 week, and it won't be localized."

Gold futures for delivery on the Comex exchange rose 2.5 percent to $1,688.70 per troy ounce, just marginally off the $1,695.90 intraday ounce.

It's the highest level in almost two weeks, in a rally sparked by the possibility of a deep recession and a prolonged period of low interest rates, along with significant rises in government loans.

Spot gold at $1,650.55 an ounce was up 2 percent. Thus, under the weight of strong inflows into exchange traded funds and other gold-backed goods, the premium of the futures contract over the physical commodity expanded to the most in over a week.

Global demand continues to dominate gold prices, and sustain them. Huge quantities of stimulus dilute currencies efficiently, so demand for gold comes from all directions, Phil Streible, Chief Market Strategist at Blue Line Futures in Chicago, noted.

The global marketplace saw a rise in sentiment at the beginning of the trading week, with reports that coronavirus outbreaks can de-escalate. This very promising news tends to be a good-looking scenario for good, as investors are more optimistic about jumping in and buying safe-haven metal, while realizing that there are still very difficult times ahead, including the specter of troubled inflation ahead.

Some investors have concentrated on more positive reports, including signs of slowing spread of the virus in New York City and a decrease in the number of deaths in Spain.

According to Jim Wyckoff, senior analyst at Kitco.com, this very promising news seems to be a "goldilocks" scenario for the yellow metal, as investors are more willing to move in and purchase the safe haven commodity, while recognizing that there are still very difficult times ahead, including the "specter of troubled inflation further down the road."

Silver futures increased 3.7 percent to $15.03 an ounce, on the basis of strong inflows into silver ETFs, where last week AUM fell 4.35 million ounces. Platinum futures fell 2.2 percent to an ounce at $733.60. Autocatalyst palladium, among other precious metals, was down 2.5 per cent at $2,134.32 per ounce.