Investing.com – Gold prices breached $1,900 an ounce the first time in nine years on Friday, topping out a seven-week long rally powered by assurances of more stimulus measures worldwide to fight the coronavirus.
U.S. gold futures on New York’s Comex settled up $7.50, or 0.4%, at $1,897.50 per ounce. The session peak was $1,904.10, the highest since September 2011, when Comex gold hit a record high of $1,911.60.
For the week, Comex gold rose 4.8%, rallying for a seventh straight week, and closing in on its 2011 all-time high, as well as the next widely anticipated target of $2,000 an ounce.
“We’re almost certainly going to snap the 2011 high by Monday, I think,” said Eli Tesfaye, precious metals strategist at RJO Futures in Chicago. “If it happens, then the next run will be toward $2,000.”
Spot gold, a real-time indicator of trades in gold bullion, was up $12.55, or 0.7% to $1,900.06 by 2:13 PM ET (18:13 GMT). Its session peak of $1,906.68 placed it within striking distance of breaching the record high of $1,920.85 set in September 2011. For the week, spot gold was up 5%.
For the year, Comex gold is up nearly 24% on the year while bullion has gained more than 25%.
The rally comes on the back of low interest rates and trillions of dollars of Covid-19 stimulus passed by governments and global central banks that have debased the dollar and other conventional currencies and heightened inflation fears — a situation which investors typically hedge by buying gold.
This year alone, the U.S. Congress has passed three coronavirus stimulus packages worth $3.3 trillion and is debating a fourth one anticipated to cost another $1 trillion plus. Separately, the Federal Reserve has devised loans and other market and economic support programs worth hundreds of billions of dollars to offset negative effects to growth from the coronavirus. EU leaders, meanwhile, agreed earlier this week on a historic 750 billion euro ($857 billion) stimulus to rescue their economies from the pandemic.
Gold’s strength has also been underpinned by a slump in the dollar this year. The Dollar Index, which measures the performance of the greenback against six major currencies, has slid steadily from 17-year highs of 103.96 in March to below 95 now, its lowest in almost two years.