- Gold is on track to end the second quarter with a 12.4 gain.
- A double-digit quarterly gain was last seen in the first quarter of 2016.
- Aggressive easing by central banks seems to have boded well for gold.
Gold looks set to end the second quarter with double-digit price gains.
The yellow metal is currently trading at $1,770 per ounce, representing a 12.4% rally on a quarter-to-date basis. That is the biggest quarterly gain since the first three months of 2016 when prices rose by 16.11%.
Gold loves liquidity
Gold, a precious metal with limited supply, seems to have benefitted from the massive liquidity infused by the US Federal Reserve and other major central banks over the past three months.
The Fed's balance sheet has expanded by over $3 trillion since the beginning of the virus crisis in early March. Meanwhile, the combined balance sheet of G4 central banks has risen by $5 trillion during the same period. The central banks have been running accommodative monetary policies to help their respective economies absorb the shock arising from the coronavirus outbreak.
In addition, intermittent episodes of US-China tensions likely played a role in pushing gold higher.
The yellow metal looks set to extend gains over the coming months as the central banks are unlikely to unwind their ultra-accommodative policies anytime soon. Further, border standoff between India and China, heightened prospects of trade between the US and the European Union and the lingering US-China tensions would continue to draw haven bids for gold.
Goldman Sachs expects gold to set a new record high of $2,000 in the medium-term. The investment bank, however, is of the opinion that further gains would remain elusive unless the US inflation rises above2% and is met with a muted monetary policy response.
|Today last price||1771.12|
|Today Daily Change||-1.44|
|Today Daily Change %||-0.08|
|Today daily open||1772.56|
|Previous Daily High||1776.13|
|Previous Daily Low||1765.8|
|Previous Weekly High||1779.41|
|Previous Weekly Low||1742.97|
|Previous Monthly High||1765.38|
|Previous Monthly Low||1670.72|
|Daily Fibonacci 38.2%||1772.18|
|Daily Fibonacci 61.8%||1769.75|
|Daily Pivot Point S1||1766.86|
|Daily Pivot Point S2||1761.17|
|Daily Pivot Point S3||1756.53|
|Daily Pivot Point R1||1777.19|
|Daily Pivot Point R2||1781.83|
|Daily Pivot Point R3||1787.52|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.