Gold surged to its highest in nearly eight years on Wednesday as rising coronavirus cases globally dented hopes of a rapid economic recovery and pushed investors towards safe haven assets.
Spot gold prices climbed 0.6% to $1,777.53 per ounce, having earlier hit their highest since October 2012 at $1,779.06. U.S. gold futures gained 0.7% to $1,794.60.
“Everybody is worried about a second wave of the coronavirus not only in the U.S., but in Latin America, Brazil and Russia, so that’s supporting the rally,” said Jigar Trivedi, commodities analyst at Mumbai broker Anand Rathi Shares. “People are expecting stimulus packages from central banks and higher the stimulus, better the prospects for gold.”
The United States had a 25% increase in new cases of COVID-19 in the week ended June 21 compared with the previous seven days, while the death toll in Latin America has surpassed 100,000, a Reuters analysis found.
The European Union is prepared to bar travellers from the United States, putting the country in the same category as Brazil and Russia, the New York Times said.