Gold pushed further past $2,000 on Wednesday in the face of a weak dollar and expectations of more stimulus measures for the pandemic-ravaged global economy, while stocks in Europe and on Wall Street rallied on encouraging corporate earnings.
Oil prices rose to their highest since early March on a big drop in US crude inventories and on the weak dollar, which was pushed lower by data showing eurozone business activity returned to modest growth in July.
The final Composite Purchasing Managers’ Index (PMI) from IHS Markit climbed to 54.9 from June’s 48.5, better than a 54.8 flash estimate, indicating significant improvement consistent with the continued easing of lockdowns, analysts said.
Gold set a new record after scaling $2,000 for the first time on Tuesday, as investors seek a store of value on fears government stimulus in response to the pandemic will trigger inflation, devalue other assets and keep bond yields low.
Spot gold prices rose 1.53% to $2,049.00 an ounce, after earlier reaching a record $2,055.1006.
The dollar standard of the past 50 years is under open question because of the enormous amount of increased money supply by the Federal Reserve, said Ryan Giannoto, director of research at alternative ETF provider GraniteShares.
“The dollar is collapsing under the weight of $3 trillion in printed dollars, this all comes out in the wash with higher gold prices,” Giannoto said.
You can read up to 3 premium stories before you subscribe to Magzter GOLD
Log in, if you are already a subscriber
Get unlimited access to thousands of curated premium stories, newspapers and 5,000+ magazines
READ THE ENTIRE ISSUE
August 06, 2020