Gold rose 1% Monday to its highest in more than seven years as dismal U.S. data underscored how badly the C-19 coronavirus chaos has damaged the world’s Top economy, while Palladium soared over 9% on better-than-expected demand outlook.
Spot gold was up 1% at 1,759.13 oz by 0708 GMT, after rising to its highest since 12 October 2012 at 1,764.46 earlier.
US gold futures gained 0.9% at 1,772.70.
Markets are pricing in that the economic recovery is going to be a little slower than previously expected, and that’s probably going to require an environment of lower rates due to Friday’s really poor economic data that is the big catalyst.
Data out Friday showed US retail sales and industrial production both plunged in April, putting the economy on track for its deepest contraction since the Great Depression.
Federal Chairman Powell said a US economic recovery may stretch deep into next year and a full comeback may depend on a coronavirus vaccine.
The Bank of England is also looking at options such as negative interest rates as the economy slides into a deep C-19 coronavirus slump, according to its chief economist.
Gold is considered an attractive investment during times of political or economic turmoil. Lower interest rates also reduce the opportunity cost of holding non-yielding gold.
Have a healthy week, Keep the Faith!
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