* Gold needs a period of consolidation -technical analysts
* Silver rises to more than 7-year high
* Interactive graphic tracking global spread of coronavirus:
opens
in an external browser https://tmsnrt.rs/3aIRuz7
(Updates prices)
By Eileen Soreng
Aug 5 (Reuters) - Gold soared to a record high on Wednesday
as a weakening dollar, falling returns on U.S. bonds and a break
above historic resistance at $2,000 an ounce added momentum to
buying by investors seeking a safe store of value.
As the COVID-19 pandemic has roiled markets, gold has gained
nearly 35% this year and is one of 2020's best performing
assets.
Investors fear economic stimulus unleashed in response to
the pandemic will trigger inflation, devaluing other assets, and
keeping bond yields historically low, which enhances the appeal
of non-yielding gold.
Breaking above $2,000 for the first time on Tuesday and
hitting a new high of $2,044.34 an ounce earlier on Wednesday,
spot gold XAU= was up 1.1% at $2,041.09 by 1337 GMT.
U.S. gold futures GCcv1 climbed 1.7% to $2,055.30.
"There's a level of fear in the markets which is almost
palpable," said independent analyst Ross Norman.
"Momentum is feeding on itself, based upon real concerns
about the failure of the macro economy to show any meaningful
signs of recovery."
Silver prices XAG= also jumped 4.2% to $27.10, the highest
since April 2013. Silver, which is both a safe-haven asset and
widely used in industry, has risen over 51% this year,
outperforming even gold.
Inflation-adjusted U.S. 10-year yields have fallen to below
minus 1% from 0.15% at the start of this year. US10YTIP=RR
The dollar has also fallen to multi-year lows, making gold
cheaper for buyers holding other currencies and denting the
appeal of an asset that competes with gold as a safe haven. It
fell again on Wednesday as Washington remained deadlocked over a
relief package. USD/ Many analysts think gold will rally further, with Bank of
America saying it could reach $3,000 over the next 18 months.
"The only thing I can think of that would take the wind out
of its sails would be a viable and easily distributable vaccine
for the virus," said StoneX analyst Rhona O'Connell, though she
said gold's journey higher could be volatile.
Many analysts say gold's rally has been so fast a short-term
fall in prices and period of consolidation is likely.
Elsewhere, platinum XPT= rose 2.3% to $959.01 and
palladium XPD= was 1.3% higher at $2,168.04.
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Gold versus U.S. yields and dollar https://tmsnrt.rs/31fEMns
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