Gold prices rose on Thursday, to extend gains for the second, as the US dollar fell due to a drop in the US Treasury bond yields, while safe-haven demand on gold increased due to the fears over the coronavirus health crisis in most parts of the world.
Gold prices rose 0.7% to $1,652.63 an ounce, after opening at $1,640.87, and earlier hitting an intraday low of $1,638.59.
The yellow metal gained 0.4% yesterday, to resume its gains after hitting a pause in the previous day due to profit-taking from a 7-year high of $1,689.33.
The US dollar index fell 0.5% today, to deepen its losses for the fifth straight day, and hit a 2-week low at 98.67 points, which comes in favour of gold and other dollar-denominated metal prices.
The drop in the US dollar is due to the 10-year US Treasury bonds yields continued to fall for the second day in a row, and hit a new record low at 1.2970%, which crippled the greenback.
Accordingly, the successive negative news around the coronavirus in most parts of the world spooked investors, especially after the US health centers warned about the possibility of an outbreak in the country, which led the US interest rate futures to be fully priced for the prospects of the Fed to cut rates at the next June meeting by 25 basis points, which were at only 50% a week ago.
Gold stocks at the SPDR ETF fell by 4.39 metric tonnes yesterday, the first drop since Jan. 31, to reach a total of 935.70 mt, and give up the highest level since Nov. 10, 2016 at 940.09 mt.