Gold Hits 8-Year High as Investors Favor Safety

Gold Hits 8-Year High as Investors Favor Safety


Gold prices rallied towards their highest levels since 2012, supported by woes over a surge in new coronavirus cases around the world. On the other hand, the prospects of further fiscal and monetary stimulus, to boost the economic recovery in top economies, boosted the demand for the inflationary hedge. The price of a gold ounce rose to $1773. Meanwhile, the price of a silver ounce hovered near $18, and palladium futures held steady near $1930.


The Reserve Bank of New Zealand concluded its monetary policy meeting by keeping policy unchanged. Interest rates remained at a historically low level of 0.25%, and the asset purchases held steady at NZD60 billion. The bank expressed readiness to use further tools to support the economy if needed. Also, the committee stated that the recent appreciation in the New Zealand dollar exchange rate placed further pressure on export earnings. The NZDUSD drifted lower to $0.6430, the EURNZD rose to 1.7859, and the GBPNZD advanced to 1.9398.


The dollar index, which measures the greenback against a basket of major currencies, rebounded slightly to 96.87 as investors favored safer currencies in today's early trading. The rising coronavirus cases around the globe continue to impose a risk on global economic recovery. The EURUSD dipped to $1.1287, the GBPUSD declined to $1.2465, and the AUDUSD fell to $0.6901.


Major US stock index futures dived as investors' appetite took a hit from the implications of the surging coronavirus cases. The Dow Jones Industrial Average futures eased to 25704, the S&P500 futures declined to 3085, and Nasdaq futures plunged to 10125 after posting a record high of 10294 in yesterday's session.


Oil prices faltered at their highest levels since early March, weighed down by the cautious sentiment as investors are afraid that a serious second round of infections could disrupt the economic activity again. On the other hand, the American Petroleum Institute reported a buildup in crude oil stock by 1.749 million barrels. Official figures will be published today by the US Energy Information Administration. The West Texas Intermediate Crude August delivery fell to $39.56, and Brent Blend August delivery tumbled to $41.97.

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