Gold futures exploded on Monday to finish at 3.75% on stocks, hitting a peak of more than seven years as general concerns over the spread of the coronavirus fuel investors’ appetite for the safe haven metal , regardless of whether the US stock indexes have recovered. on the belief that deaths from the pandemic will soon stabilize.
American general surgeon Jerome Adams said Sunday “this is going to be the hardest and saddest week in the life of most Americans, quite frankly”, told “Fox News Sunday” that “it will be our time in Pearl Harbor, our 9/11 moment, only it’s not going to be located. “
But after two days of range trading, stocks soared on Monday, helping to recover from last week’s setback, as the count of new coronavirus cases in the United States seemed to drop in New York.
The Dow Jones Industrial Average rose 1,200 more points, or more than 5.5% at 2 p.m. EST, while the S&P 500 and the Nasdaq Composite climbed about 5.4% each.
Gold has joined the party, going from $ 1,638 an ounce to just over $ 1,715, which gives gold bugs more optimism and interest rates, which the metal will continue to target 2000 $ an ounce as some analysts predicted.
“The consequences of negative rates in a cash-rich environment will continue to drive up the price of gold as sellers are less eager to sell to the hungriest buyers,” said Spina. The “march towards $ 2,000 and beyond therefore continues. The next stop is now $ 1,700, with a move over to boost the buying momentum even more in a bullish state. “
Overall, “this somewhat encouraging news seems to be a gold caps scenario for gold, as buyers are more confident to step in and buy the safe haven, knowing that there is still very difficult times ahead, including the specter of lower problematic inflation. “Said Jim Wyckoff, senior analyst at Kitco.com.
Although some feel that orders to stay at home in many states will help reduce the damage and spread of the coronavirus pandemic, market analysts continue to see the destruction of the stock market continue, which will support safe haven assets like gold.
“Fiscal and monetary stimulus will provide a good backdrop for gold, but demand for a safe haven will be high due to the coming financial strains that will persist over the next few months as the US economy enters a very dangerous place, “said Edward Moya, senior market analyst at Oanda, in a market update.
Gold investors can continue to use ETFs like the ETF Direxion Daily Gold Miners Bull 3X (NYSEArca: NUGT), up more than 11% on Monday,VanEck Vectors Gold Miners (NYSEArca: GDX)and theETF Direxion Daily Jr Gold Miners Bull 3X (NYSEArca: JNUG).
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