• Price Change UP Icon Gold $2,188.00 +12.00
  • Price Change UP Icon Silver $24.54 +0.15
  • Price Change DOWN Icon Platinum $903.00 -5.00
  • Price Change DOWN Icon Palladium $1,000.00 -6.00
Diversification
August 9, 2023

Why Should Investors Diversify with Gold Today?

Reuters, By Brijesh Patel in
Share On Social Media

Gold steadies near 1-month peak as recession risks rise

Gold prices held steady near a one-month high on Monday, supported by growing concerns over the extent of the economic hit from the coronavirus pandemic. Spot gold was up 0.1% at $1,690.08 per ounce by 9:16 GMT, having risen to its highest since March 9 on Friday. Most European markets are closed for the Easter Monday holiday. U.S. gold futures fell 0.6% to $1,741.40.

“Gold has been on the positive side from the last two to three weeks; mostly it’s safe-haven buying and the main reason is that the global economy is likely to face a recession because
of the COVID-19 issue,” Hareesh V, head of commodity research at Geojit Financial Services, said. More than 1.8 million people have been infected by the coronavirus globally and 113,849 have died, a Reuters calculation of the totals shows. The coronavirus pandemic, which has battered global economic growth, has forced nations to extend lockdowns to curtail its spread, and central banks have announced a wave of fiscal and monetary support measures to mitigate the financial toll.

The U.S. Federal Reserve on Thursday announced a broad, $2.3 trillion stimulus package to weather the outbreak, which has forced 16.8 million Americans to file for unemployment benefits since the week ended March 21. “COVID-19’s deflationary effect has been a headwind for gold. But this trend should reverse in 2H20 as policy responses by governments and central banks gather traction, UBS analysts said in a note. “Led by Fed easing, we now expect real U.S. interest rates to dip deeper into negative territory and perhaps even test the post-GFC (global financial crisis) lows,” UBS said.

Gold is highly sensitive to interest rates, as lower rates reduce the opportunity cost of holding non-yielding bullion. Reflecting appetite for bullion, holdings in SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, rose 0.6% to 994.19 tonnes on Thursday. European Union finance ministers also agreed on half-a-trillion euros worth of economic support, but left open the question of how to finance recovery in the bloc. Among other precious metals, palladium rose 2.9% to $2,233.96 per ounce, while platinum dipped 0.7% to $743.06 and silver fell 0.3% to $15.27.

*This information is solely an excerpt of a third-party publication and is incomplete. Please subscribe to the referenced publication for the full article. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

Get Your Free Report
A Rising Storm
All form fields are required *
Thank You

Want your kit sooner?

Faster delivery
is available by phone.

800-444-8317

Download Your Report

Enter your phone number to be connected to a Monex Account Representative.

Thank You
Want your kit sooner?

Faster delivery is

available by phone.

800-444-8317
All form fields are required *
Embed Spot Prices!
Copy and Paste below code into your HEAD tag / before end tag of body to embed chart.
Copy and paste code below wherever you want your chart displayed.
Copied to clipboard
Embed This Chart!
Copy and Paste below code into your HEAD tag / before end tag of body to embed chart.
Copy and paste code below wherever you want your chart displayed.
Copied to clipboard
FREE REPORT OFFER
A Rising Storm
Thank You
Please check your email for a confirmation link and Free Report!
I agree to receive news and promotional material from this website and understand I can cancel at any time. Privacy Policy