- Spot Gold briefly touched a record high of $US2,000 an ounce on Tuesday amid a rally for the commodity.
- Traders piled into the so-called safe-haven asset on hopes that another US stimulus bill is in the works.
- An additional bill could put further liquidity into markets and weigh on rates, supporting the commodity.
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Gold just hit a new record high as traders pile into the so-called safe-haven asset on hopes that another US coronavirus stimulus bill is coming soon.
Spot gold rose as much as 1.2% to $US2,000.58 an ounce on Tuesday before paring some gains.
“Gold has cleared the $US2000 level and it might not be done as Treasury yields continue to slide,” said Edward Moya, senior market analyst at OANDA.
A new stimulus bill could add extra liquidity to markets and weigh on rates, which would support the precious metal further. Investors are watching for signs of progress as Democrats and Republicans debate the details of the bill before the Senate goes on summer break Friday.
While Republicans and Democrats have agreed on another round of stimulus checks, they remain divided on how to move forward with the additional $US600 weekly unemployment benefit that expired last week. Democrats want to extend the benefit in full, while Republicans want to slash it by hundreds of dollars per week.
Gold has rallied amid the coronavirus pandemic, supported by a weak US dollar, low yields, as well as fiscal stimulus. On Monday, worldwide holdings in gold ETFs surged to 3,365 tons, second only to the US government.
Gold has surged nearly 32% year-to-date.