Forex Marketz Daily Forex News – Fully Markets Update
Gold futures contracts soared higher overnight. The widely traded spot futures contract is trading near a seven year high price after gaining 1.5 percent on Monday and the spot contract continues to inch higher during today’s Asian trade session.
Traders once again fled into safe haven asset classes, including the bullion, as the Covid-19 deals a serious economic blow to the global economy and U.S. corporate earnings.
The spot gold futures contract raced above the key $1,700 pivot to see its highest price level since December 2012. Overnight, during the North American trade session the spot contract settled up 1.5 percent at $1,717.36 an ounce.
U.S. gold futures, for front end delivery, finished up half a percent to trade at $1,761.40 per ounce. Earlier this contract hit its highest price point since February 2013 at $1,769.50 per ounce.
Inflation is on the rise and that is good for the yellow metal. As price pressures rise, the bullion becomes a safe store to maintain value.
Gold Traders watch Central Bank News as the Fed Fires another Cannon
Global central banks, including the U.S. Federal Reserve continue to fire big cannons and do whatever it takes to insulate their economies against the economic damage stemming from the Covid-19 global pandemic.
Last week, the Federal Reserve Board (Fed) announced a broad $2.3 trillion accommodative monetary stimulus package to weather the storm. Nearly 16.8 million Americans are now unemployed as of end of 21 March.
The question is: what does the Federal Reserve have left in its tool box? Not much. Monetary policy, alone, cannot support the economy. Fiscal policy is also needed.
European Union Finance Ministers finally agree on a Stimulus Plan
Last week, on Thursday, European Union Finance ministers agreed to 500 billion euro stimulus support for their battered economies. They left the door open on how to finance a recovered for the single monetary bloc as their economies head into a steep recession.
The Coronavirus pandemic has now infected over 1.8 million people around the world. There are 113,849 dead and countries are enforcing strict lockdown protocols to stem the outbreak. This is forcing central banks to shift to ultra-accommodative monetary policies and governments enacting aggressive fiscal measures.
