By Barani Krishnan
Investing.com – Gold futures came within $ 15 of striking market bulls’ target of $ 1,800, while the spot price of bullion hit near 8-year highs on Tuesday, propelled by a weaker dollar and fresh stimulus money planned by governments across the world to fight a second wave of Covid-19.
“Trade tensions, second wave concerns, the 10-year real yields (TIPS) decline deeper into negative territory, and taper tantrum risks will continue to support bullish calls to reach $ 1,800 in the short-term and eventually record high territory later this year,” said Ed Moya, an analyst at New York’s OANDA.
for August delivery settled up $ 15.60, or 0.9%, at $ 1,782 per ounce on New York’s Comex. The benchmark for gold futures earlier spiked to $ 1,785.85, the highest reached on Comex since April 14.
, which tracks real-time trades in bullion, rose by $ 15.32, or 9%, to $ 1,770.15. The intraday high for the bullion indicator was $ 1,770.22, the highest since October 2012.
Holdings in SPDR Gold Trust (P:), the world’s largest gold-backed exchange-traded fund, meanwhile, rose 0.58% to 1,166.04 tonnes on Monday, a level last seen in April 2013.
The last time gold hit $ 1,800 was in 2011, the same year it scaled record highs above $ 1,900.
Tuesday’s rally came as Treasury Secretary Steve Mnuchin said the United States was likely to pass by next month another stimulus package to aid economic recovery from the coronavirus pandemic.
“We do anticipate there’ll be a need for more fiscal response and we’ll be doing that in July now,” Mnuchin said during an appearance on the Time100 Talks series. “We’ll call this one CARES 4, as we’ve done what we refer to as three and a half of CARES so far.”
The previous phases of CARES — known in full as the Coronavirus Aid, Relief and Economic Security Act — have approved a total of $ 3.3 trillion as loans and grants to businesses, paycheck protection for workers and personal aid to qualifying U.S. citizens.
“The tsunami of stimulus coming in from everywhere is not only inflationary but also painting a weaker picture for the economy and making gold look attractive,” Edward Meir, an analyst at ED&F Man Capital Markets, was quoted saying on Reuters.
Gold was also propped up by weakness in the dollar, which acts a contrarian trade to the yellow metal.
The , which measures the greenback against a basket of six competing currencies, slid 0.3%, to 96.657.