Gold eases through $2,000/oz as Covid-19 cases rise, US Congress mulls more aid

AFTER several days of near misses, gold finally breached the $2,000 per ounce level ending Comex trade $34,70/oz higher to settle at $2,021,00/oz, said Bloomberg News.

The rise “… comes as no surprise in view of the ongoing high numbers of new Covid-19 cases, the continuing cliff-hanger in US Congress over an additional economic aid package, ever more widespread negative real interest rates and highly-valued stock markets,” Commerzbank analyst Carsten Fritsch was quoted as saying in a research note.

Silver, which has also seen significant price appreciation, was at $25.50/oz, a gain of some 4.7% on the day.

The Tuesday jump for gold and silver – a steady climb for both commodities in recent weeks – comes amid a persistent concern about the economic implications of the pandemic that has created uncertainty about the landscape for global markets and economies, with governments and central banks forced to roll out a raft of fiscal and monetary stimulus to limit the damage to business activity, said MarketWatch.

According to RBC Capital Markets, prices may top $3,000/oz should market conditions align to fulfil the bank’s bull case scenario for the metal, described as a 40% probability. In its base-case view, which has 50% odds, prices will pass $2,000/oz in the coming quarters, the bank said.

“Gold positioning indicates that investors’ attitudes toward the metal have changed amid the public health crisis, economic turbulence, and extremely easy monetary policy actions,” Christopher Louney, a market strategist for RBC was quoted to have said by Bloomberg News. “Gold’s outright price gains have made it a star asset in 2020, arguably appearing more popular than ever,” he said.

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