(Bloomberg) — Gold paused after rallying for nine days to a record as investors weighed comments from the Federal Reserve on uncertainties over the economic recovery amid the coronavirus pandemic.
Bullion was supported as the U.S. central bank left interest rates near zero and vowed to use all its tools to drive the recovery from the downturn that Chair Jerome Powell called the most severe “in our lifetime.” He sounded a dour tone, noting that more fallout from the outbreak still lies ahead. U.S. deaths surpassed 150,000, the highest official toll in the world.
Gold has soared almost 30% to a record this year as the pandemic drove demand for havens amid a weaker dollar and low interest rates. With more stimulus on the horizon, Goldman Sachs Group Inc (NYSE:). has said that bullion is the currency of last resort and forecasts a surge to $2,300 an ounce. Real yields on 10-year U.S. Treasuries are sinking toward -1%.
“Gold should continue to rise higher after the Fed’s promise to keep the stimulus coming,” Edward Moya, senior market analyst at Oanda Corp., said in a note. “The Fed’s backstop is not going away, but if Congress botches the size and timing of the coronavirus relief bill, gold could consolidate before breaking beyond the $2,000 level.”
Another round of talks between the Trump administration and congressional Democrats Wednesday brought them no closer to a compromise on a virus-relief plan, as enhanced unemployment insurance for millions of out-of-work Americans runs out. In his remarks, Powell said supporting the recovery would need help from both monetary and fiscal policy.
traded 0.3% lower at $1,965.90 an ounce at 8:17 a.m. in Singapore, after hitting an all-time high of $1,981.27 on Tuesday. traded 0.2% higher at $1,981.60 after peaking at $2,000 this week.
Spot silver fell 0.2% to $24.2614 an ounce, and is down for a third day. The Bloomberg Dollar Spot Index steadied near the lowest in almost two years.
©2020 Bloomberg L.P.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.