Commodities

Gold set for best weekly run since 2006

Bloomberg August 7 | Updated on August 07, 2020 Published on August 07, 2020

Bullion on track for biggest annual gain in over four decades

Gold is set for the longest stretch of weekly gains since 2006 as it continues to post records amid rising haven demand, the prospect of more Fed stimulus and simmering US-China tensions. Silver closed in on $30 an ounce as it headed for its biggest weekly jump since 1980.

White House and Democratic negotiators driving toward a deal on a final massive virus relief package by the end of the week still must overcome a raw mix of election-year pressures, internal GOP splits and a profound lack of trust between the parties. Meanwhile, US President Donald Trump said he could act unilaterally on some measures.

Bullion has rallied more than 35 per cent in 2020, putting it on track for the biggest annual gain in over four decades, as the health crisis, negative real rates, a weaker dollar and geopolitical risks spark a flight to precious metals. Further gains are predicted — Bank of America Corp reiterated its forecast that gold may reach $3,000 an ounce in 18 months and said it’s feasible that silver could hit $35 in 2021.

“The gold rally shows few signs of abating,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. “The weak dollar and continued fund inflows into precious metals ETFs continue to prop the market higher.”

Spot gold rose as much as 0.6 per cent to a record $2,075.47 an ounce and traded at $2,068.63 by 8:45 am in Singapore. Prices are up for a ninth week. Holdings in exchange-traded funds backed by the metal are at a record.

Spot silver advances

Spot silver advanced as much as 3.2 per cent to $29.8591 an ounce, the highest since 2013. Prices have jumped 22 per cent this week.

Investors will focus on the monthly employment report from the US due Friday, which is expected to show a slowdown in job gains last month after a surge in coronavirus cases across the country. On the geopolitical front, a high-powered US panel recommended tightening the disclosure requirements for Chinese companies listed on American exchanges, amid heightened tensions between the two nations.

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Published on August 07, 2020
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