Gold rises on US Dollar Weakness, Low Interest Rates COMMODITIES: Gold Rises to a Fresh Record On Dollar Weakness, Low Interest Rates
09:16 AM EDT, 08/05/2020 (MT Newswires) -- Gold solidified its hold above US$2,000 per ounce early on Wednesday, rising to a fresh record as the U.S. dollar weakened.
Gold for December delivery was last seen up US$32.80 to US$2,053.80 per ounce after closing above US$2,000 on Tuesday for the first time.
The price of the metal has gained 33% since the start of the year as central banks slash interest rates and pump new cash into their economies to maintain liquidity to offset plunging demand and support business activity during the pandemic. U.S. legislators are negotiating another stimulus package as unemployment remains near record levels.
"It is probably the expectation of further stimulus measures on the part of governments and central banks that is driving prices ever further up. It is also worth mentioning the weak US dollar, even if it has not depreciated significantly further of late. Bond yields are also on a clear downward path, which is likewise lending tailwind to the gold price," Commerzbank analyst Carsten Fritsch said in a note.
The U.S. dollar weakened again, making gold more affordable for international investors and boosting demand. The ICE dollar index was last seen down 0.59 to 92.79 points.