Gold climbs to highest in 7-years on Fed warning

JOHANNESBURG – Gold rose to the highest in more than seven years after the Federal Reserve said stocks and asset prices could suffer a significant hit from coronavirus, and warned the process of economic recovery may stretch through until the end of next year. Palladium surged more than $100 (R1851) in 20 minutes.

Commercial real estate could be among the hardest-hit industries should the health crisis deepen, the U.S. central bank said in its twice-yearly financial stability report Friday. 

Separately, Chairman Jerome Powell said in an interview with CBS that a full recovery of the US economy could drag through 2021 and depended on the delivery of a vaccine.

Bullion has surged 16 percent this year as the spread of the virus curbed economic growth, roiled markets, and prompted vast amounts of stimulus to be unleashed by governments and central banks. Further bolstering the case for the metal has been recent speculation US interest rates could go negative, while holdings in gold-backed exchange-traded funds are at a record.

Spot gold climbed as much as 1.2 percent  to $1764.73 an ounce, the highest since October 2012, and traded at $1763.58 at 6:44 a.m. in London.