Gold pasts physiological level of $1800 on haven demand

Created : 2020-07-08 , at 14:43 Ahmed Mamdouh 221

Gold prices rose during trading on Wednesday to record the highest level in 8 years, surpassing the psychological level of $1,800 an ounce, in light of the high demand for safe havens in the financial markets due to fears of high cases of infections with the Corona virus, and anticipation of imposing more stimulus by countries to face the great economic decline.

The intraday gold prices witnessed a rise for a third consecutive session, recording the highest level since November 2011 at $ 1,803.90 an ounce, and trading was opened today at the level of $ 1795.23 an ounce.

Coronavirus outbreak in the United States passed a dark new milestone exceeding 3 million confirmed cases on Tuesday, as more states reported record numbers of new infections, and Florida faces an imminent ICU shortage.

On the other hand, three Fed officials had expressed concern that an escalating infection threatens to cut consumer spending and job gains as some stimulus programs are about to end.

In Australia, the closure was re-imposed in Melbourne, Australia's second largest city, as officials seek to contain the outbreak of the Corona virus, prompting the S&P/ ASX200 index to record its worst daily performance in a week, down more than 1.5%.

All these factors have served to keep investors going to gold as a safe haven, in light of the unstable conditions in the financial markets. The SPDR Gold Trust Fund, which is the largest financially traded fund in gold in the world, stated that its gold holdings increased by 0.66% to $1199.36 tons on Tuesday.

Gold's rise today comes despite the recovery of the dollar index, which measures the performance of the federal currency against a basket of six major currencies, recording a rise for the second day in a row to 97.00.

On the other hand, stock indices in the Asian region and Europe decreased after a similar decline in US stocks yesterday, which increased the demand for gold, especially with the increase in the number of infections, and expectations of the negative impact on the performance of the global economy.