Gold futures were higher Wednesday morning as weakness in the U.S. dollar and nagging concerns about the global economy, supported a rally in the precious metal.
“All the bullish reasons to belong to gold in the medium term still apply—notably, the incomprehensible amount of money being printed by central banks and fiscal spending by governments to offset the impact of the coronavirus outbreak,” wrote Stephen Innes. global chief market strategist at AxiCorp, in a daily note.
Gold for June delivery GC00, +1.71% on Comex rose $35.10, or 2.1%, at $1,722.90 an ounce, after shedding 1.4% on Tuesday and marking the lowest close for an active-month contract since April 8, FactSet data show.
BofA Global Research raised its 18-month price target for gold to $3,000 an ounce from $2,000 or more than 50% above a nine-year old record at around $1,921, citing the prospects of endless monetary expansion from central banks, including the Federal Reserve, to limit the economic damage from the COVID-19 pandemic.
A slide in the dollar, off 0.3% against a basket of a half-dozen currencies, as gauged by the Intercontinental Exchange Inc. DXY, -0.24% also was helping to support an advance for precious metals. A softer greenback can make commodities priced in the currency more attractive for buyers using other monetary units.
May silver SIK20, +1.03%, meanwhile, picked up 17 cents, or 1.1%, at $15.04 an ounce, following a 4.7% slide in gold’s sister metal.
Among other metals, May copper HGK20, +1.23% was up 2 cents, or 1%, at $2.253 a pound. July PLN20, +1.09% advanced 0.5%, to reach $761.30 an ounce and June palladium PAM20, -0.23% retreated 0.3% at $1,898.90 an ounce.