Gold surged on Tuesday to its highest in nearly 8 years as mounting fears of a resurgent coronavirus pandemic put the precious metal on track for its biggest quarterly gain since March 2016.
Spot gold jumped 0.7% to $1,784.16 per ounce. The session high was $1,785.22, its highest since October 2012. U.S. gold futures surged 1.2% to $1,802.30.
Tai Wong, head of base and precious metals derivatives trading at BMO, said commodity trading advisers and algorithms were encouraged as gold headed toward highs of $1,780.
“Bulls are delighted with what will almost certainly be a strong close which provides the basis for a push to $1,800 in short order.” Gold was headed for its third straight month of gains, driven by policy stimulus measures to support economies decimated by the pandemic.
“The big picture view, is that gold is in the middle of a regime shift from a safe-haven asset to an inflation hedge asset,” said Daniel Ghali, commodity strategist at TD Securities.
“U.S. yields have continued to grind lower and the result of that is that real rates are printing new lows” which has boosted the precious metal, long considered a hedge against inflation and currency debasement.
U.S. states have reversed re-openings and closed businesses to combat a spike in cases. U.S.
Federal Reserve Chair Jerome Powell on Monday said the outlook for the world’s biggest economy was “extraordinarily uncertain”.
In other metals, platinum rose 2.2% to $823.26 an ounce, but was looking to post its first monthly fall in three and biggest quarterly gain since September 2012.
Palladium edged 0.1% higher to $1,904.93 per ounce. The metal was set for its fourth straight monthly decline and worst quarter since September 2011.
Silver climbed 1.9% to $18.19 per ounce and was on track for best quarter since end-2010.