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Gold in $1,700 Flight, Joining Wall Street’s Virus Rally for Different Reason SPONSOR: Labrador Gold $LAB.ca $RIO.ca $WHM.ca $SIC.ca $NXS.ca

Posted by AGORACOM at 11:52 AM on Wednesday, April 8th, 2020

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  • The virus is triggering huge physical demand for gold

They’re both rallying on the same thing. One is gaining on a negative spin and the other on a positive narrative. Gold cracked the $1,700 ceiling on Monday as global anxiety over the Covid-19 pandemic, its impact on economies and inflation widened. Wall Street, meanwhile, jumped on signs of some U.S. relief from the coronavirus.

“It’s like two tales of the same virus,” said Tariq Zahir, a proprietary gold trader at Tyche Capital Advisors in New York. “One is perpetuating fear that’s causing an accumulation of the safe haven called gold. The other is giving hope to equity markets that the U.S. may be getting some break from the pandemic, though it’s very very early in the day to say that.”

Gold futures on New York’s COMEX settled up $48.20, or 3%, at $1,693.90 per ounce. It hit $1,709.50 at the session high. The $1,700 level has been a rather important resistance mark for the yellow metal, which broke it only twice earlier this year, the first time in January and then in March. In both cases, gold futures fell back soon after the test.

Monday’s rally marked the fourth-straight day of gains for COMEX gold, which has gained just over $100 an ounce or 6% in that period. 

Spot gold, which tracks live trades in bullion, was up $41.64, or 2.6%, at $1,659.98 by 3:00 PM ET (19:00 GMT). 

“The virus is triggering huge physical demand for gold,” said Phillip Streible at Blueline Futures in Chicago. “Currencies around the world are being devalued right now because everyone is engaging in massive stimulus programs in order for their economies to be safe. So, the supply of gold is being attacked from all angles.”

“And don’t forget the trickle effect of all that money on inflation and gold as the best known instrument to hedge that,” Streible added.

The United States has passed a $2 trillion stimulus package to fight the pandemic and is considering another package, with White House Economic Adviser Larry Kudlow acknowledging on Monday renewed calls for a multi-trillion-dollar “Coronavirus Bond”.

On Wall Street, the Dow was up more than 1,200 points, or 6%, or  as new data from New York, the epicenter of the U.S. coronavirus, suggested the state may be peaking on infections from the pandemic, though the daily death toll remains alarmingly high.

SOURCE: https://finance.yahoo.com/news/gold-1-700-flight-joining-151715366.html

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