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Gold heads for best monthly gain since January 2012 on rush to safety

Prices hit a record $1,980.57 on Tuesday and are up over 10% so far this month, their biggest monthly percentage gain since Feb. 2016

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Gold  | Gold Prices

Reuters 

Gold

By Eileen Soreng

(Reuters) - rose on Friday and headed for its biggest monthly gain in 8-1/2 years as the impact of the worsening coronavirus pandemic on the U.S. economy hammered the dollar, prompting investors to seek refuge in bullion.

Spot gained 0.8% to $1,975.10 per ounce by 1207 GMT, while U.S. futures rose 1.5% to $1,970.80.

Prices hit a record $1,980.57 on Tuesday and are up nearly 11% so far this month, their biggest monthly percentage gain since Jan. 2012.

Silver also climbed 3% to $24.25 per ounce, on course for its largest monthly rise on records going back to 1982 - up about 34% - with additional impetus from hopes for a revival in industrial activity.

"Gold is more of a store of value right now than pretty much anything else," said Michael Hewson, chief market analyst at CMC UK.

The dollar <.DXY>, often seen by investors as a rival safe-haven, was on track for its biggest monthly drop in almost a decade. Its decline makes dollar-priced gold cheaper for holders of other currencies.

Along with U.S. data showing the deepest economic contraction in at least 73 years in the second quarter and a rise in unemployment, the dollar was also hurt by President Donald Trump raising the possibility of delaying the November presidential election.

"Optimism about a V-shaped recovery is very much at risk and gold is seeing the benefit from that. It's quite likely that we'll see $2,000 an ounce in fairly short order," Hewson said.

Gold's latest jump has taken gains for the year to 30%, also driven by low interest rates globally amid widespread stimulus from central banks since the metal is considered a refuge from inflation and currency debasement.

Money managers allocated $3.9 billion into gold, the second largest weekly inflow ever, Bank of America said on Friday.

Elsewhere, platinum eased 0.1% to $902.28 per ounce, and palladium fell 0.8% to $2,065.87.

 

(Reporting by Eileen Soreng in Bengaluru; Editing by Jan Harvey)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, July 31 2020. 21:16 IST
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