Gold prices skyrocketed on Tuesday, posting a hefty gain for a second successive session, as massive stimulus plan announced by the Federal Reserve triggered hectic buying in the commodity.
A weaker dollar too supported gold’s steep rise.
Gold’s rally was also due to suspension in mining operations in three major gold refineries in Switzerland due to mandatory closure of non-essential industry in the country to prevent the spread of the coronavirus.
The dollar index dropped to a low of 101.05 in early trades today, but later recovered to 102.10, but still trailed its previous close by about 0.4%.
Gold futures for April settled at $1,660.80 an ounce, up $93.20, or about 6%, the biggest single-session gain in dollar terms, since November 1984. In percentage terms, gold futures’ gain in the session, is the biggest in eleven years.
On Monday, gold futures for April surged up $83, or about 5.6%, to $1,567.60 an ounce.
Silver futures for May ended up $0.996 at $14.257 an ounce, while Copper futures for May settled at $2.1800 per pound, gaining $0.0795 for the session.
On Monday, the Fed said it would go beyond the $700 billion in asset purchases announced last week. The U.S. central bank proposed to buy a wide range of investments, including corporate bonds for the first time, to improve trading in markets that help home buyers finance the purchase of houses, state and local governments borrow and businesses get enough short-term cash to make payroll.
Investors also hoped that the U.S. Senate leaders and the Trump administration will reach an agreement over a stimulus bill that would inject nearly $2 trillion into the economy.