Gold soared to its highest in over seven years after the central bank disclosed that stocks and asset prices could take a major blow from the ongoing global health disaster, and cautioned that the cycle of economic rebound could continue until the end of 2020. In 20 minutes of trading, palladium has soared over $100.
If the global health problem escalates, real estate may be among the hardest-hit sectors, the U.S. Federal Reserve said Friday in its twice-yearly financial report. In a separate interview with CBS, Fed chief Jerome Powell stressed that a complete turnaround of the U.S. economy could go on through 2021 and relies on a vaccine being produced.
Spot gold advanced more than 1 percent at $1,760.84 an ounce after the commodity climbed to its highest mark since October 12, 2012 at $1,763.51. U.S. gold futures were up 0.7 percent to $1,770.50.
According to market expert Kyle Rodda of IG Markets, the general business landscape is pricing in that the recovery will be a little slower compared to initial forecast, and that it would require an environment of more affordable rates. Rodda stressed that Friday's weak U.S. economic figure was the major impetus.
In India, prices of the precious metal continued to rise for the second successive day, monitoring stable global rates as doubts on the animosity between China and the US as well as gloomy US economic figures underpinned the safe haven commodity.
Contract for June yellow metal traded up by 1.01 percent at Rs 47,865 per 10 grams on the Multi-Commodity Exchange (MCX). Silver futures were trading over 3 percent higher at Rs 48,280 per kilogram.
Gold price was up more than 1 percent late Monday around the world to its highest in over seven years as bleak US data highlighted the magnitude of destruction the Covid-19 crisis has brought to the globe's leading financial market.
Physical demand for the precious metal was lukewarm in most of Asia last week with retail shopping yet to witness any major rebound even as premier hubs China and India loosened some of their pandemic-triggered lockdowns.
Bullion has rallied 15 percent so far this year as the spread of Covid-19 dragged down on economic advance, distorted key markets, and forced huge amounts of government financial aid to be rolled out by central banks. Further strengthening the case for gold has been recent rumors of U.S. interest rates going negative, while holdings in gold-support exchange traded funds likewise hit new peaks.
