Gold at a 7-year high on economic concerns
Fed stimulus also propels prices
- Gold prices rose to a more than seven-year high on rising fears of a steeper economic downturn and amid massive liquidity measures undertaken by global central banks.
- Spot gold gained 0.6% to $1,724.72 per ounce by 1.34 p.m. IST , having touched its highest since November 2012 at $1,726.85 earlier in the session. U.S. gold futures rose 0.6% to $1,772.20.
- Liquidity (from the Federal Reserve) combined with the background of lower interest rates makes gold a much more attractive proposition.
- Reflecting appetite for bullion, holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund (ETF), rose 1.6% to 1,009.7 tonnes on Monday, the highest since June 2013.
- Gold as a safe-haven has gained traction as currencies are being devalued by massive stimulus programs.
- This has also increased physical demand of gold (such as ETFs) to hedge against the debasement of fiat currencies.
- Silver gained 0.6% to $15.54 while platinum was up 2.5% to $766.70.