Gold prices hit $2,000 an ounce for the first time

NEW YORK/ LONDON — Gold prices hit $2,000 an ounce for the first time on Tuesday, the latest surge in a commodity seen as a refuge amid economic uncertainty.

The precious metal hit the symbolically important benchmark near 16:15 GMT before retreating somewhat. 

Gold prices have risen more than 30 per cent this year as the coronavirus outbreak has weakened the economy and clouded the outlook.

Earlier, Asian stocks rallied following another record close on Wall Street, with investors cheered by forecast-beating US data and hopes for fresh stimulus for the world's top economy, while European equities traded narrowly mixed.

The dollar was largely higher and oil prices slid 2 per cent.

Tech fuelled a surge in New York, sending the Nasdaq to a new all-time high on Monday, as traders looked for firms likely to benefit from people being forced to stay or work from home.

There was also a cheer for figures showing the US manufacturing sector expanded last month at its fastest pace since March last year, which followed strong factory readings from China and Europe.

Still, AxiCorp's Stephen Innes said: "The composition of China's economic recovery offers a roadmap to the rest of the world that is not especially bullish for a consumer-driven rebound.”

"It's easier to normalise the supply-side of the economy than the demand side in a post-pandemic-shock environment."

Attention is now on Washington, where Democrats and Republicans are battling to hammer out a new package to save the US economy from the ravages of the pandemic.

With extra unemployment benefits and a moratorium on evictions now dried up, there are worries millions of Americans will suffer if nothing is passed soon, which would batter the already stuttering economy.

Democrat House Speaker Nancy Pelosi said a meeting with Treasury Secretary Steven Mnuchin and White House chief of Staff Mark Meadows had been "productive".

Expectations for a deal

In the Senate, Chuck Schumer said both sides were "moving closer" but added there were a "lot of issues that are still outstanding".

Reports said Donald Trump, facing an election in November and trailing in polls, was considering using an executive order to re-impose the ban on evictions and push through a payroll tax cut.

Leaders of top companies including Walmart, Facebook, Microsoft, Google-parent Alphabet and Starbucks urged lawmakers to push a deal through, warning of a "catastrophic" impact on the economy and employment if a new round of federal aid is withheld.

While Washington was locked in dispute, there was still an expectation they would reach a consensus.

"There's a big desire from both parties to get some kind of stimulus passed. I think the market is expecting that," said Bob Phillips, at Spectrum Management Group.

 Rodrigo Catril of National Australia Bank added: "For now it seems that the market is travelling with the expectation that a deal will eventually be struck, so it is a matter of when not if."