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Gold accelerates higher on fragile economic recovery hopes

Gold accelerates higher on fragile economic recovery hopes
August 6, 2020
NEW YORK (Reuters) - Gold extended its record-breaking run on Thursday, driven by expectations of more monetary response as surging virus cases continue to pummel the US economy. Spot gold hit an all-time high of $2,069.21 per ounce and was up 1% at $2,059.45 at 11:02 am EDT (1502 GMT). US gold futures also rose 1%, to $2,069.40. “There are mixed signals that the economy is recovering and some of the signs of recovery are relatively superficial as they show aggregate figures and not how medium and small enterprises continue to suffer,” said Jeffrey Christian, managing partner of CPM Group. “We have a very long way to go before we see a proper economic recovery.” Data showed US jobless claims fell last week, but a staggering 31.3 million people were receiving unemployment checks in mid-July, as new infections battered the economy. Gold has rallied more than 35% this year as it is considered an asset that should hold its value while the pandemic and money printing by central banks erode the value of others. Markets awaited further policy response as US Democratic leaders and White House officials continued their talks to try hash out a next wave of relief to help the economy. Silver prices jumped 4.1% to $28.12 per ounce, having hit a more than 7-year peak of $28.42, helped by a combination of investment and industrial demand. “While there are no early chart clues to suggest the gold and silver markets are close to major tops, both are now getting short-term overbought, technically, and are due for downside corrections in the uptrends,” Kitco Metals senior analyst Jim Wyckoff said in a note. “And remember that with the higher volatility and bigger daily price gains seen at present, there will also be bigger downside corrections when they come.” Platinum rose 1% to $977.22 per ounce and palladium climbed 1.4% to $2,212.92.