Gold Soars Past $2,000, Gold Up On Stimulus Plan

by davidscott

Madeline Sponsler, FISM News

 

Gold surged past the $2,000 mark on Tuesday after Democrats and the White House appeared closer to an agreement on new stimulus to help the coronavirus-hit economy while stocks on Wall Street ended higher as investors awaited more aid from Washington.

Oil prices also rose on the prospect of more stimulus. However, Treasury yields fell to their lowest since March over the concerns about the ultimate cost of the coronavirus aid.

Boosted by stimulus concerns, gold prices breached the psychological $2,000 level for the first time.

Markets have lost confidence that Congress will approve enough benefits in a stimulus bill, which will lead the Federal Reserve to expand its balance sheet, said Lee Ferridge, head of North America macro strategy for State Street Global Markets.

Increased bond purchases through the Fed’s quantitative easing, or QE program, and the increase in money supply will ultimately lower the value of the dollar, Ferridge said.

“It all falls back on the Fed, that is what’s driving this,” he added pushing gold higher and yields lower at the same time.

“Gold is outperforming, Treasuries are outperforming.”  “It’s all about the debasement of the dollar.”

 

 

Sourced from Reuters

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