Gold above $1,800 an ounce, first time since 2011

LONDON  — Gold reached above $1,800 an ounce on Wednesday for the first time since 2011, with the precious metal benefitting from its haven status as the coronavirus outbreak triggers global economy fears.

Gold hit $1,800.86 an ounce around 0830 GMT on the London Bullion Market, the highest level in 8.5 years, as a weaker dollar also makes the metal priced in the US unit attractive to investors.

“It is little surprise that the original safe haven is continuing its rally,” said Carlo Alberto De Casa, chief analyst at ActivTrades.

“Investors are still buying stocks but it seems they want to be covered in case of any market correction.”

Neil Wilson, chief market analyst for Markets.com, said gold was winning support also thanks to fears of high inflation caused by central bank stimulus to prop up the global economy.

“The gold bull thesis rests not only on the requirement for safe assets given the economic uncertainty, but also longer term on fears of a surge in inflation caused by the massive increase in the money supply,” he said in a client note.

Gold’s record-high stands at $1,921.18 an ounce.

Stocks stall

Europe’s stock markets slipped for a second straight session on Wednesday, with concerns about fresh spikes in coronavirus infections.

The eurozone’s key indices were down by a per cent or more at the close, with London doing a little better.

On Wall Street the Dow Jones was unchanged in the late New York morning. 

Equity markets were in “a struggle for any meaningful direction”, said Craig Erlam, an analyst with OANDA. 

“The rally has clearly lost momentum as the grand reopening runs into the kind of challenges we all feared,” he said.

A string of positive indicators, from China to the US in recent weeks — as well as hopes for a vaccine and the easing of lockdowns around the world — had fuelled a global stock markets rally that had lifted equities out of their March depths.

But while hopes that the world economy will recover remained intact, the ongoing spread of coronavirus has seen indices run out of steam over the past two days.

That helped gold climb on the London Bullion Market to the highest level in 8.5 years, as recent dollar weakness also made the metal priced in the US unit attractive to investors.