Last Thursday, the US Federal Reserve announced a $2.3 trillion stimulus package to tackle the coronavirus outbreak, in a move that further added to ongoing turmoil in gold prices.

On Tuesday, gold prices skyrocketed to their highest since November 2012, according to data released by CME Group, the world’s largest financial derivatives exchange.

During early trading at the Chicago Mercantile Exchange, the cost of gold futures contract for delivery in June stood at about $1,771.3 per ounce.

Bullion contract prices pertaining to supplies in May and April amounted to $1,761 and $1,757.4 per ounce, respectively.

The financial market news website DailyFX reported that the new record surge in gold prices took place as “investors continued to fret about the global economic hit dealt by the coronavirus [pandemic]”.

The remarks were echoed by Michael McCarthy, chief strategist at CMC Markets, who was cited by Reuters as saying that “the concerns about the economic outlook are particularly supportive for gold” and that “liquidity [from the Federal Reserve] combined with the background of lower interest rates makes gold a much more attractive proposition”.

The remarks come after gold futures traded at around $1,568.5 an ounce last week, following the US Federal Reserve’s announcement about its $2.3 trillion stimulus package aimed at containing the COVID-19 crisis.

In another development, the International Monetary Fund pledged that it would provide debt relief to 25 member states under its Catastrophe Containment and Relief Trust to allow them to allocate more sums for combating the coronavirus pandemic.

This followed The Wall Street Journal warning in a report in late March that US investors and bankers are facing “severe shortages” of gold bullion and coins due the growing COVID-19 fallout.

“Dealers are sold out or closed for the duration. Credit Suisse Group AG, which has minted its own bars since 1856, told clients this week not to bother asking. In London, bankers are chartering private jets and trying to finagle military cargo planes to get their bullion to New York exchanges”, the report said.

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