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

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

Gold rose on Friday and headed for its biggest monthly gain in 81/2 years as the impact of the worsening coronavirus pandemic on the U.S. economy hammered the dollar, prompting investors to seek refuge in bullion.

  • Reuters
  • Last Updated: July 31, 2020, 4:14 PM IST
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Gold 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 gold was up 0.8% at $1,975.30 an ounce by 0927 GMT, while U.S. gold futures rose 1.5% to $1,970.70.

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 2.4% to $24.11 an ounce, on course for its largest monthly rise on records going back to 1982 – up over 30% – 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 Markets UK.

The dollar , 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.

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Elsewhere, platinum was flat at $903.09 and palladium dipped 0.6% to $2,069.70.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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  • First Published: July 31, 2020, 4:14 PM IST
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