Gold price sprints to near 8-year top as virus crisis rages on

Gold price surged to its highest in nearly 8 years on Tuesday as mounting fears of a resurgence of new coronavirus cases kept safe-haven demand for gold alive, setting the precious metal on path for its biggest quarterly gain since March 2016. Spot gold jumped 0.5% to $1,779.44 per ounce by 2:09 p.m. EDT (1809 GMT). The session high was $1,785.46, its highest since October 2012. U.S. gold futures settled up 1.1% at $1,800.5.

Tai Wong, head of base and precious metals derivatives trading at BMO, said commodity trading advisers and algorithms were encouraged as gold headed toward highs of $1,780.

"Bulls are delighted with what will almost certainly be a strong close, which provides the basis for a push to $1,800 in short order."

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Gold, long considered a hedge against inflation and currency debasement, was headed for its third month of gains, driven by stimulus measures to support economies decimated by the pandemic.

"The underlying bullish fundamentals in the gold market remain and those include the COVID-19 that is still prompting safe-haven demand, the central bank stimulus that has been record setting," and could cause inflation in the future, said Kitco Metals senior analyst Jim Wyckoff.

Some U.S. states have reversed reopenings and closed businesses to combat a spike in cases.

U.S. Federal Reserve Chair Jerome Powell on Monday said the outlook for the world`s biggest economy was "extraordinarily uncertain".

"U.S. yields have continued to grind lower and the result of that is that real rates are printing new lows" which has boosted the precious metal, said Daniel Ghali, commodity strategist at TD Securities.

In other metals, platinum rose 1.5% to $817.83 an ounce, but was looking to post its first monthly fall in three and biggest quarterly gain since September 2012.

Palladium jumped 1.4% to $1,929.55 per ounce. The metal was set for its fourth monthly decline and worst quarter since September 2011.

Silver climbed 1.5% to $18.13 and was on track for its best quarter since end-2010.