Gold rose 2% on Tuesday, extending gains from a near 4% surge in the previous session, after the US Federal Reserve's unprecedented measures to help an economy reeling from the coronavirus pandemic halted a rush for cash. Spot gold rose 1.3% to $1,572.45 per ounce by 0637 GMT. The metal rose 3.7% on Monday, its highest percentage gain since June 2016.
US gold futures climbed 1.9% to $1,596.70. "Gold is surging higher after the Fed went above and beyond in unveiling measures to support the economy," said Edward Moya, a senior market analyst at broker OANDA. The US central bank on Monday rolled out an extraordinary array of programs and will lend against student loans, credit card loans, and US government backed-loans to small businesses. That failed to push Wall Street higher on Monday, but it was enough to drive a rebound in Asian shares.
Meanwhile, a coronavirus economic stimulus package, remained stalled in the US Senate on Monday as lawmakers haggled over its provisions, but the US Treasury secretary and the Senate Democratic leader voiced confidence a deal would be reached soon.
"The US Senate setback seems only temporary and gold traders are feeling pretty confident that at the end of the week, massive fiscal and monetary stimulus should help calm markets. If market volatility stabilizes somewhat, gold will resume its safe-haven status," said OANDA's Moya. President Donald Trump said on Monday he is considering how to reopen the US economy when a 15-day shutdown ends next week, even as the virus spreads rapidly. "There is just not enough around to support the underlying promissory notes (paper gold)... It's a godsend for bullion investors."
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