Producers of metals and other raw materials rose sharply as traders bet that a $2 trillion stimulus bill passed by the U.S. Senate would be enough to offset a halt in economic activity that caused a historic spike in unemployment claims.
A record 3.28 million workers applied for unemployment benefits last week as the new coronavirus hit the U.S. economy, marking the end of a decadelong job expansion. The number of Americans filing for claims was nearly five times the previous record high, and some economists said the statistic made a global recession all but inevitable in 2020.
Gold futures rose to $1,650 an ounce, for their fifth gain in six sessions, and neared multiyear highs as traders bet "reflation" efforts from the Federal Reserve and the Congress would weaken the dollar and support precious-metals prices.
"The Fed's actions are working, and funding market stress overseas will likely continue to ease and that means the dollar may continue to slide," said Edward Moya, senior market analyst at foreign-exchange brokerage OANDA, in a note to clients. "Gold will resume its role as a favored safe-haven as traders begin to try to model how bad the global economy will get and knowing that governments and central banks are doing everything they can."
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