Gold Advances To 7-Year High On Jobless Claims And Fed Measures

After jobless claims in the US soared exponentially and steps were taken by the US Fed to combat the fall-out of coronavirus crisis, gold's appeal has further gained as a safe-haven. In the run up to the coronavirus crisis, a whopping 17 million jobs have been purged in the US in mere three weeks time.

Gold Advances To 7-Year High On Jobless Claims And Fed Measures

For coming out of the crisis which as per IMF is another Great Depression not seen in over a situation requires massive bailout package from government's across the world. In line the US Fed on Thursday released a package worth $2.3 trillion.

And in its wake, Gold futures jumped the highest since 2012 by 4%, defying strong equity in the US equity on hopes of leveling up of the crisis and on bail-out package. In general gold and equities share inverse relationship when it comes to performance i.e. when equities are weak, gold gains.

Another factors fuelling the jump in price of the yellow-metal is low interest rate regime and bail out package across the board to combat coronavirus impact.

On the COMEX in New York, gold futures for June jumped as much as 4.1% to scale to $1,752.80 per ounce. Spot gold however climbed 2.2% to $1,681.94 an ounce at mid-afternoon Thursday. On previous occasions also gold has surpassed $1700 levels but failed to sustain such levels.

Future prices are also moving higher as bullion in physical form cannot be transported across the borders.

In India, prices have also been lifted on safe haven appeal and if the second stimulus targeted at SMEs is announced inflation may trend higher and further push gold prices which in Mumbai bullion market has scaled beyond Rs 45000 mark.

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