On June 24, gold prices in the Asian session hit a new high amid strong global rally in the precious metal markets. On the MCX, August gold futures gained about 0.4% to reach a new high. On the other hand, the silver rates plunged with the futures losing around 0.14%.
Data from the global markets show that gold prices surged to the highest level in around eight years. The rapidly increasing coronavirus cases all over the world and hopes of more stimulus measures increased the demand for gold rapidly.
Based on the global markets, spot gold gained 0.2% to reach $1,769.59 per ounce. Earlier in the session, the precious metal hit $1,773 which is its highest level since late 2012. Also, the US gold futures gained 0.4% to reach $1,789.20.
Jigar Trivedi of Anand Rathi Shares said that some profit-taking could be seen at higher levels, adding:
“Sentiments are positive. Gold has appreciated by 24% this year (25% in 2019). Hence we are cautiously optimistic.”
In the week that ended June 21, COVID-19 cases in the US surged by 25% compared to a week earlier based on estimates. Among several other precious metals, platinum remained steady at $828.92 while silver was mostly unchanged oscillating around $17.96.
In the meantime, the US Treasury Secretary Steven Mnuchin said on June 23 that the next stimulus bill will focus majorly on getting people back to work rapidly. He aslo said that he would consider a further delay of the tax filing deadline.
Gold Benefits From Currency Debasement
Gold always seems to benefit from stimulus measures from the various central banks since it is widely seen as a hedge against currency debasement and inflation. A weaker US dollar also helped gold to rise to these highs. The dollar index moved near a more than one-week hit in the previous session.
Investors and investment demand for gold keeps increasing. The world’s largest gold-backed ETF or exchange-traded fund, SPDR Gold Trust, confirmed that its holdings increased 0.28% to 1,169.25 tonnes on June 23.
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