TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Gold hits record high on haven demand as markets rally sputters

News Desk (Agence France-Presse)
Hong Kong
Mon, July 27, 2020

Share This Article

Change Size

Gold hits record high on haven demand as markets rally sputters A merchant wearing a face mask and latex gloves, due to the COVID-19 coronavirus pandemic, reaches for jewellery at a jeweller's shop at the Dubai Gold Souk in the Gulf emirate on May 12, 2020, as markets re-open amidst an easing of pandemic restrictions.Gold hit a record high Monday as investors rushed into the safe-haven on concerns about China-US tensions, a spike in virus infections around the world and a lack of progress on a new stimulus bill in Washington. (AFP/Karim SAHIB )

G

old hit a record high Monday as investors rushed into the safe-haven on concerns about China-US tensions, a spike in virus infections around the world and a lack of progress on a new stimulus bill in Washington.

After months of healthy rallies across equity markets, fuelled by trillions of dollars in government and central bank support, traders are beginning to step back as they weigh the long-term economic impact of the coronavirus.

With vast monetary easing measures put in place by the Federal Reserve pushing the dollar lower against most other currencies, gold is flying, hitting an all-time high of $1,944.71, well above its previous record of $1,921.18 seen in 2011.

Eyes are on the Fed's next policy meeting this week, with some predicting further measures to boost the economy -- possibly negative interest rates -- that could put more pressure on the dollar and send bullion above $2,000.

There are also concerns that a worse-than-forecast reading on second-quarter US gross domestic product could spark another dollar sell-off.

While the weak dollar has been a key catalyst for the metal's advance, gold has also been boosted by its attractiveness as a haven in times of turmoil with China-US relations souring by the day.

"Strong gains are inevitable as we enter a period much like the post-global financial crisis environment, where gold prices soared to record levels as a result of copious amounts of Fed money being pumped into the financial system," said Gavin Wendt, senior resource analyst at MineLife.

The greenback was down against most other currencies, with the euro at its highest since September 2018, while higher-yielding units such as the South Korean won and Indonesian rupiah were also up.

Stock markets were mostly up but with little conviction as investors fret over the impact of the virus on the economy.

Shanghai was slightly higher, having suffered big losses last week as China and the US closed consulates in Chengdu and Houston, ramping up tensions between the superpowers.

Sydney was up 0.2 percent, while Singapore and Jakarta each added 0.3 percent, though Seoul climbed more than one percent and Taipei jumped more than two percent.

Tokyo, Hong Kong and Mumbai drifted lower.

Investors are growing concerned about lawmakers' slow progress on a new US stimulus program, with Republicans still to present their proposals worth around $1 trillion, which is less than a third of the plan set out by Democrats.

There are concerns an agreement could take some time, hitting millions of Americans whose much-needed extra unemployment benefits are about to come to an end.

 

Key figures around 0400 GMT 

Gold: UP 2.2 percent at $1,944.71 per ounce

Tokyo - Nikkei 225: DOWN 0.3 percent at 22,685.31

Hong Kong - Hang Seng: DOWN 0.1 percent at 24,683.66 (break)

Shanghai - Composite: UP 0.1 percent at 3,199.67 (break)

Euro/dollar: UP at $1.1715 from $1.1652 at 2100 GMT 

Dollar/yen: DOWN at 105.56 yen from 105.95 yen 

Pound/dollar: UP at $1.2848 from $1.2791 

Euro/pound: UP at 91.13 pence from 91.07 pence

West Texas Intermediate: DOWN 0.3 percent at $41.15 per barrel 

Brent North Sea crude: DOWN 0.4 percent at $43.15 per barrel

New York - Dow: DOWN 0.7 percent at 26,469.89 (close)

London - FTSE 100: DOWN 1.4 percent at 6,123.82 (close)

 

 

Bloomberg News contributed to this story 

 

 

 

{

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.