Constellation Energy and Vistra stock surge after PJM capacity auction results
(Updates prices)
* U.S. jobless claims exceed 6 mln for second straight week
* Gold up 4.2% so far this week
* Interactive graphic tracking the global spread: open https://tmsnrt.rs/3aIRuz7
in an external browser
By Sumita Layek
April 9 (Reuters) - Gold prices surged over 2.5% to their
highest in a month on Thursday after the U.S. Federal Reserve
announced a massive stimulus to combat the economic toll of the
coronavirus pandemic.
Spot gold XAU= jumped 2.5% to $1,686.85 per ounce by 1:31
p.m. EDT (1731 GMT), having earlier hit its highest since March
9 at $1,690.03. It has risen about 4.2% so far this week.
U.S. gold futures GCv1 settled 4.1% higher at $1,752.80.
"The Fed unveiled yet another howitzer from its arsenal
offering substantial relief to small and medium sized businesses
as well as municipalities," said Tai Wong, head of base and
precious metals derivatives trading at BMO.
"Gold's rallying because this monetary largesse will
eventually have to be repaid and that payment may come as sudden
higher inflation somewhere down the road."
The Fed rolled out a broad, $2.3 trillion effort to bolster
local governments and small and mid-sized businesses to keep the
U.S. economy intact as the country battles the coronavirus
pandemic. Fed Chair Jerome Powell said the central bank will continue
to use all the tools at its disposal until the U.S. economy
begins to fully rebound from the harm caused by the outbreak.
Data showed the number of Americans seeking unemployment
benefits in the last three weeks has blown past 15 million, with
weekly new claims topping 6 million for the second straight time
last week as the pandemic has abruptly grounded the country to
halt. More than 1.47 million people have been reported infected by
the new coronavirus globally and 87,760 have died. "The economic impact of the pandemic is likely in any case
to preoccupy markets for a very long time to come, even once the
pandemic has eased," Commerzbank analysts said in a note.
"Gold is likely to profit from the unprecedented glut of
central bank money and new debt."
Also helping gold, the dollar .DXY fell 0.6%, en route to
a weekly dip. USD/
Holdings of gold by ETFs rose in March to a record high of
3,185 tonnes, worth $165 billion, the World Gold Council said on
Wednesday. Major physical bullion hubs saw activity dwindle this week
due to coronavirus-led restrictions, with strained supply chains
cut off from soaring safe-haven demand in some regions. GOL/AS
Elsewhere, palladium XPD= rose 0.2% to $2,179.13 per
ounce, platinum XPT= rose 2.5% to $748.10 and silver XAG=
rose 2.6% to $15.44 and were up over 6% so far this week.
Most markets will be closed for Good Friday on April 10.