Gold Nears Record, Silver at Six-Year High on Spur From...

Gold Nears Record, Silver at Six-Year High on Spur From Stimulus

Bloomberg

21 July 2020, 8:27 pm ACST Updated on 22 July 2020, 4:44 am ACST

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Precious metals are soaring to multi-year highs on the back of persistent concerns over the coronavirus and the outlook for further economic stimulus worldwide. Gold futures surged to an almost nine-year peak and silver touched the highest since 2014 after Hong Kong reported additional cases of the virus and new infections in the Australian state of Victoria surged, fueling demand for haven assets. European Union leaders agreed on an unprecedented stimulus package to pull their economies out of a virus-induced recession. Silver, used in manufactured products ranging from solar panels to electronics, is getting an added boost from supply concerns and bets on a rebound in industrial demand.

The two metals are the top performers in the Bloomberg Commodity Index this year as investors clamor for insurance against further economic fallout from the virus. Low interest rates amid easy monetary policies have also bolstered the appeal of the non-interest-bearing assets. The jump in demand has sent holdings in exchange-traded funds backed by the metals to all-time highs.

“For gold it’s the same old story: Real rates continue to grind lower and we are reaching levels close to the global financial crisis,” Daniel Ghali, TD Securities commodities strategist, said by telephone. “We’ve seen that silver has been increasingly trading as an industrial metal. We think the marginal unit of demand for silver is coming from the industrial metal side.”

Gold futures for August delivery rose 1.5% to settle at $1,843.90 an ounce at 1:30 p.m. on the Comex in New York, the highest closing price for a most-active contract since September 2011. Gold futures are less than $100 away from the all-time high of $1,923.70 set that year.

— With assistance by Isis Almeida

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