Apr 7, 2020 - Economy

Gold surges as coronavirus upheaval continues

Data: FactSet; Chart: Axios Visuals

Gold futures rose to their highest since late 2012 on Monday, surging above $1,700 an ounce and pushing out the spread over spot prices, even as U.S. stock indexes rose by more than 7%.

The big picture: Investors continue to buy gold even on days that equity prices soar, in part because of worries about the coronavirus outbreak but also because of the prospect of untold trillions in spending from global governments and central banks, decreasing the value of the dollar and fiat currencies.

  • Some have made a similar case for Bitcoin and other cryptocurrencies, which have rallied since March 12.

Watch this space: The market is experiencing a divergence between spot gold prices and futures reminiscent of the period about two weeks ago during a historic squeeze in New York futures.

  • "At that time, supply channels were strangled as refineries shut down and flights halted, curbing sellers’ capacity to meet commitments to deliver metal," per Bloomberg.
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