Spot Gold Jumps 1% To Cross $2,000/Ounce Mark As Dollar Weakens
Gold prices climbed 1 per cent to surpass the $2,000-mark on Tuesday, as the dollar weakened to a more than two-year low, with traders also focusing on minutes from the Federal Reserve's last policy meeting set to release this week. Spot gold rose 0.7 per cent to $1,999.26 per ounce by 0717 GMT (12:47 pm in India), having earlier hit a one-week high of $2,007.19 per ounce.
US gold futures were up 0.5 per cent at $2,007.60 per ounce.
"The fragile currency environment and the weak economic numbers in the United States are stealing the dollar's safe-haven appeal," said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade.
Safe-haven buying in gold should continue given the amount of stimulus measures and an increase in novel coronavirus cases, she added.
A softer dollar, which makes gold cheaper for those holding other currencies, underpinned prices on Tuesday. This added to the bullion's 32 per cent jump this year following massive global stimulus measures that fuelled inflation and currency debasement fears.
On Monday, gold jumped as much as 2.4 per cent, with further impetus from Warren Buffett's Berkshire Hathaway buying a stake in major gold miner Barrick Gold Corp.
Meanwhile, eyes are also on the minutes from the US central bank's last meeting due on Wednesday.
"Traders are getting the last kick at the can ahead of the FOMC minutes where the view is for the Fed to have talked about YCC (yields curve control) or inflation-targeting which is bad for the dollar and good for gold," said Stephen Innes, chief market strategist at financial services firm AxiCorp. .
Lower yields and interest rates decrease the opportunity cost of holding non-yielding assets such as gold.
Adding to the pandemic-induced hit to the global economy was increasing US-China friction with the Trump administration announcing it will further tighten restrictions on Huawei Technologies Co.
Silver climbed 2.1 per cent to $27.97 per ounce, and platinum gained 1.5 per cent to $963.29. Palladium fell 0.4 per cent to $2,190.20.
