Gold Holds Above $2,000 For The First Time In History

By Glenn Dyer | More Articles by Glenn Dyer

Gold ended above the once mythical $US2,000 an ounce level for the first time ever on Tuesday, gathering momentum late in the session as government bond yields headed lower and as the US dollar’s brief strengthening eased.

At the same time, Nasdaq ended at another record – its 30th of the year so far and the S&P 500 climbed back above 3,300 points.

Gold had risen above $US2,000 an ounce briefly in trading on Monday but fell back. Tuesday saw it roar past that level and continue rising in electronic trading going into Asian dealings on Wednesday.

Helping push it higher were signs Democrats and the White House were closer to an agreement on new stimulus to help the coronavirus-hit economy.

Gold’s strength stood out on a day when silver also rose, copper fell, iron ore prices edged higher, oil rose and Wall Street awaited agreement on the new stimulus package.

On Tuesday, Comex December gold rose $US34.70, or 1.7%, at $US2,021 an ounce, after a less than 0.1% gain on Monday and starting out with meagre gains on Tuesday.

It kept rising in late trading and went on rising in after-hours trading to be around $US2,035 an ounce – up more than $US48 an ounce just before 7 am.

Analysts at Bank of America Global Research forecast that bullion will surge by 50% over the next 18 months to around $US3,000 an ounce and see other precious metals benefiting in the COVID-19 environment.

Meanwhile, Comex September meanwhile, joined in the charge higher, climbing $US1.61, or 6.6%, to end at $US26.028 an ounce after the commodity rose 1% on Tuesday.

In other Comex metals, September copper lost 1.75 cents, or 0.6%, to reach $US2,8945 a pound.

Metal Bulletin iron ore prices saw smaller gains than the jump on Monday. The price of 62% Fe ore delivered to northern China rose $US1.85 to $US117.88, the highest for more than a year.

Nasdaq dominated Wall Street. The Dow picked up 164.07 points, or 0.6%, at 26,828.47; the S&P 500 index rose 11.90 points, or 0.4%, to 3,306.51, near its intraday peak, while the Nasdaq finished 38.37 points, or 0.4%, to close at 10,941.17, also near its highs of the session.

The Nasdaq notched its 30th record close of 2020, putting the benchmark one record away from exceeding its record close tally for all of 2019 and placing it ahead of the 29 records for 2018, according to Dow Jones Market Data.

Meanwhile, oil futures reversed early losses, ending higher Tuesday as traders awaited data on US crude stocks tonight after last week’s surprise 10 million-plus barrel fall.

In New York, West Texas Intermediate crude for September delivery rose 69 cents, or 1.7% to finish at $41.70 a barrel on the New York Mercantile Exchange, after trading as low as $40.14.

October Brent crude ended with a gain of 28 cents, or 0.6%, at $44.43 a barrel on ICE Futures Europe.

The Aussie dollar was around 71.65 US cents.

The US dollar was easier and US treasury bond yields dipped 5 points to end just above 0.50%. It’s down 16 points in the past month as worries grow about the health of the COVID-19 riddled economy.

The ASX 200 futures had the market starting weaker with a 13 point loss. After the huge 1.88% surge on Tuesday, the tone today will be very different.

Perhaps local investors will take a closer look at the downgraded forecasts from the Reserve Bank and the impact on the wider economy of Victoria’s lockdowns and wonder about the damage to future earnings.

Retailers will be in the gun – such as JB Hi-Fi, Wesfarmers’ Bunnings, and Kmart for instance.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

View more articles by Glenn Dyer →