Gold prices jump, rally toward highest close in about seven years

Gold prices on Monday headed sharply higher, putting the precious metal on track for its highest settlement since 2012.

Bullion has marked mostly rangebound moves from a high of $1,788 to a low of $1,676 an ounce in recent weeks but has been underpinned by higher by worries about the harm to the global economy from the COVID-19 pandemic and the monetary-policy response by central banks to limit the impact of business closures, which were only recently being undone.

“Gold is skyrocketing with the price climbing to its highest in seven years. Dovish comments from the Federal Reserve and concerns about the stock market have lifted bullion,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades, in a daily research note.

Gold for June delivery on Comex GC00, 0.16% GCM20, 0.15% climbed $14.50, or 0.8%, to $1,770.80 an ounce, putting the metal near its highest settlement since 2012 if it holds its current level. Prices for the most-active contract are around their highest since April 14, according to FactSet data. For the week, gold gained 2.5% based on the most-active contract at Friday’s close.

Meanwhile, July silver SIN20, 3.37% surged 63 cents, or 3.7%, at $17.70 an ounce, after rallying by 8.2% last week.
Commodity experts said that a steady rise for the stocks since touching their recent low point in late March may also be helping to bolster demand for gold.
“It is clear that investors are continuing to buy bullion as an insurance in case there are any further corrections on stocks,” wrote De Casa. “The general feeling of uncertainty and fears that stocks could be overpriced are encouraging traders to bet on further rallies for gold,” he wrote.
Meanwhile, Federal Reserve Chairman Jerome Powell said during a CBS’s “60 Minutes” on Sunday that the central bank was still able to deliver more stimulus as needed to help alleviate problems for the economy.
“We’re not out of ammunition by a long shot,” Powell said.