Gold prices surge
Gold surged record high as negative sentiments over issues such as the coronavirus outbreak as well as
U.S.-China tensions boosted investor sentiment.
Spot gold traded 2% higher at about $1,941.11 per ounce after earlier trading as high as $1,943.9275 per
ounce. Those levels went beyond the previous record high price set in September 2011, as reported by
Gold futures jumped 2% to $1,938.70 as well.
“While we think gold will continue to be supported by rising geopolitical tensions, in our view the
primary drivers of the gold price are its negative correlation to real interest rates and the dollar. We
think these three factors, in combination with limited supply growth as miners continue to restrain
capital spending, will drive gold prices higher,” UBS chief investment officer Mark Haefele told to his
As per a note which is being circulated before the new highs, Commonwealth Bank of Australia’s Vivek
Dhar stated that the drop in U.S. 10-year real yields has been the “most important driver” among other
factors, such as a U.S. dollar entering the negative territory and safe-haven demand being lifted.