The dollar fell to a near two-year low versus major currencies as a standoff between Washington and Beijing showed no signs of abating with both sides ordering the closure of consulates in Chengdu and Houston.
As a result, topside targets remain on the radar as the price of gold clears the previous record high price recorded in September 2011 ($1921), but need a close above the Fibonacci overlap around $1907 (78.6% expansion) to $1920 (161.8% expansion) to bring the $1971 (100% expansion) to $1985 (261.8% expansion) region on the radar.
While governments and central banks have pumped liquidity into the global economy to support the recovery, no measures have been as aggressive as those taken by the us, where the Federal Reserve cut rates to near zero and printed $2.2 trillion while extending another $5 trillion through loans to banks. Gold may consolidate before setting its sights on $2,000 and above in coming weeks, he said. That compares with a value of around $1930 now.More news: Miami Marlins' COVID outbreak puts season in doubt for all sports
USA bond markets have been a key metric to watch in determining the path for gold, with the metal serving as an attractive hedge as yields on Treasuries that strip out the effects of inflation fall below zero.
This week's Federal Reserve meeting on July 28-29 may provide more clues for gold, and silver traders.
Looking ahead, the Fed's balance sheet looks poised to cross back above $7 trillion as it expands for the second consecutive week, and more of the same from Chairman Jerome Powell and Co. may heighten the appeal of gold as the committee remains "committed to using our full range of tools to support the economy in this challenging time".More news: Kim Kardashian in tears as she meets with Kanye West
"And as long as the (virus situation) gets worse, the market is discounting more stimulus for a longer period of time and in bigger quantities, and all of that is bullish for gold", said Edward Meir, an analyst at ED&F Man Capital Markets.
Gold for December delivery rose 0.4% to settle at $1,963.90 an ounce at 1:30 p.m. on the Comex in NY.
The U.S. dollar's longstanding status as the world's reserve currency is at risk after the greenback's weakening by unprecedented government efforts to shore up the economy during the COVID-19 pandemic, according to Goldman Sachs Group Inc. On a similar note, Silver September futures gained Rs 3,547 to trade at 64,770 per kg today, after hitting a lifetime high of Rs 64,896 earlier in today's session.More news: Chainsmokers' Hamptons show under investigation for social distancing violations; organizers respond