Gold, silver race higher on fear of second virus wave

0

Gold and silver are selling on a high, lifted by concerns over economic growth, a second wave of virus infections and simmering tensions between the U.S. and China.

Last week, gold headed back toward its peak in April l, when prices hit the highest since 2012. Silver , meanwhile jumped to a two-month high. Prices are having a long-awaited breakout moment as market anxiety mounts, according to Rhona O’Connell, head of market analysis for Europe, the Middle East and Africa and Asia at INTL FCStone.

“There are fears over everything from political leadership through the health outlook overall and associated economic financial and political risk,” she said.

Spot gold was up 0.3% at $1,735.41 an ounce at 9:54 a.m. in London, heading for its second weekly gain. Silver jumped as much 3% and traded near $16.20 an ounce, with its discount to gold coming down from recent records.

Investors turned to safe havens after U.S. Federal Reserve Chairman Jerome Powell warned earlier this week that the pandemic will take a heavy toll on the economy. Fears intensified on gloomy American unemployment data Thursday, and as President Donald Trump said he doesn’t want to talk to his Chinese counterpart right now.

Nations that enjoyed success quelling the virus, including South Korea and China, now face a rising number of infections. In the U.S., Texas saw its deadliest day and its biggest jump in new cases since the start of the outbreak. That comes two weeks after controversial moves to reopen the state’s economy.

“The market seems to be bracing itself for disastrous hard data for April and May and a wave of bankruptcies,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. That supports the traditional safe haven gold, and “has added some extra spice to silver,” he said.

Credit: Bloomberg.

LEAVE A REPLY

Please enter your comment!
Please enter your name here