Bank of America just raised its EUR/USD forecast
(Updates prices, adds graphics)
* Perfect environment for gold to move above $2,000/oz-
strategist
* Global economy expected to shrink by 3% during 2020 - IMF
* SPDR Gold holdings rise to highest since June 2013
* Interactive graphic tracking the global spread: open https://tmsnrt.rs/3aIRuz7
in an external browser
By Sumita Layek
April 14 (Reuters) - Gold soared nearly 2% to hit its
highest since late 2012 on Tuesday, with investors rushing to
the safety of bullion as the coronavirus ravaged economies
worldwide and triggered the rollout of huge stimulus plans.
Spot gold XAU= gained 1.3% to $1,735.85 per ounce by 1:34
p.m. EDT (1734 GMT), having earlier jumped as much as 1.9% to
$1,746.50.
U.S. gold futures GCcv1 settled up 0.4% to $1,768.90,
after hitting their highest level since February 2013 at
$1,788.80.
"There's a lot of safe-haven buying. It's the
recession/depression concerns that are out there right now. The
economic outlook looks pretty dire," said Bob Haberkorn, senior
market strategist at RJO Futures.
"The U.S. Fed just created $2 trillion last week and other
central banks around the world are doing the same; interest
rates are at or near zero, there's a lot of concern out there
and it's just a perfect environment for gold to trade up north
of $2,000." The global economy is expected to shrink by 3% during 2020
in a coronavirus-driven collapse of activity that will mark the
steepest downturn since the Great Depression of the 1930s, the
International Monetary Fund said. The contagion, which has infected more than 1.88 million
people globally and killed 119,168, has forced countries to shut
activity and prompted central banks to unleash support measures.
A steep economic downturn and massive coronavirus rescue
spending will nearly quadruple the fiscal 2020 U.S. budget
deficit to a record $3.8 trillion, a Washington-based watchdog
group said on Monday. Reflecting sentiment, holdings of the SPDR Gold Trust GLD ,
the world's largest gold-backed ETF, rose to 1,009.70 tonnes on
Monday, the highest since June 2013. GOL/ETF
Gold's rise came alongside gains in global equities after
Chinese trade data came in better than expected and as some
countries tried to restart their economies by partly lifting
restrictions aimed at containing the pandemic. MKTS/GLOB
Global recession forecasts combined with the rapid pace of
governmental money-printing is boosting activity in gold, INTL
FCStone analyst Rhona O'Connell said in a note.
"The metals markets as a whole are trading on the front
foot. Lively Chinese trade figures are helping the base metals
sector and the PGMs (Platinum Group Metals)."
Palladium XPD= jumped 1.2% to $2,215.03 per ounce, while
platinum XPT= climbed 3.6% to $775.51. Both metals rose over
5% earlier in the session.
Silver XAG= gained 2.3% to $15.80.
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Gold rallying alongside equities IMAGE https://reut.rs/3a3DFtq
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