GOLD SURGES TO ITS HIGHEST LEVEL IN OVER SEVEN YEARS AS CONCERNS ABOUT A LOOMING RECESSION INTENSIFY DUE TO THE IMPACT OF THE VIRUS.

Gold surged to its highest level since late 2012, marking a 7-year peak, driven by escalating concerns over the global economic downturn amid the COVID-19 pandemic. Investors flocked to the safety of bullion amidst fears of recession, prompting significant gains in the precious metal.

Spot gold rose by 0.8% to $1,727.55 per ounce, reaching a peak of 1.9% at $1,746.50 earlier in the day. Meanwhile, U.S. gold futures increased by 0.1% to $1,762.10, hitting their highest level since February 2013 at $1,788.80.

Bob Haberkorn, senior market strategist at RJO Futures, attributed the surge to heightened safe-haven demand amid recession and depression concerns. The massive economic impact of COVID-19, coupled with extensive monetary stimulus measures implemented by central banks worldwide, created a favorable environment for gold, with expectations of prices surpassing $2,000.

The International Monetary Fund forecasted a global economic contraction of 3% in 2020, likened to the Great Depression of the 1930s, as countries grapple with the pandemic’s fallout. Central banks responded with unprecedented support measures, contributing to a sharp increase in the U.S. budget deficit to a record $3.8 trillion.

Reflecting investor sentiment, holdings of the SPDR Gold Trust surged to 1,009.70 tonnes, its highest level since June 2013. Gold’s rally coincided with gains in global equities following positive Chinese trade data and efforts by some nations to ease pandemic-related restrictions and restart their economies.

INTL FCStone analyst Rhona O’Connell noted that global recession fears and extensive monetary interventions are driving gold’s momentum, while other metals, including palladium and platinum, also experienced notable gains. Palladium surged by 1.6% to $2,223.73 per ounce, and platinum climbed by 3.2% to $771.92. Additionally, silver rose by 0.7% to $15.56 per ounce.