Gold slides as US lines up fiscal measures to limit Covid-19's impact on economy
Gold price dropped by Bt50 per baht weight on Friday morning (March 20), the Gold Traders Association said.
As of 9.24am, buying price of a gold bar was Bt22,700 per baht weight and selling price Bt22,800, while buying price of gold ornaments was Bt22,285.20 per baht weight and selling price Bt23,300.
The prices dropped from Thursday’s close (March 19) when buying price of a gold bar was Bt22,750 and selling price Bt22,850, while buying price of gold ornaments was Bt22,345.84 and selling price Bt23,350.
Gold contracts in COMEX futures to be delivered in April rose by US$1.40 to $1,479.30 per ounce on Thursday’s close as governments and central banks worldwide moved to issue economic stimulus measures to deal with the Covid-19 outbreak.
The White House is considering the sale of 25-year and 50-year bonds to raise funds for various measures to relieve the burden of the American people and business sector affected by the Covid-19 outbreak.
US President Donald Trump has signed the “Families First Coronavirus Response Act” with a limit of US$1 trillion after receiving approval from the US House of Representatives and Senate.
This act has various measures including handing out cash totalling US$500 billion to American people and US$50 billion to support the aviation industry.
In addition, the US government has projects to help unemployed people from the effects of Covid-19, allowing them to test for Covid-19 free, and pay compensation to employees who took sick leave due to Covid-19 infection.
Meanwhile, the US Federal Reserve is cooperating with central banks worldwide to increase the liquidity of the dollar by making a swap agreement.
The agreement between the Fed and central banks of Australia, New Zealand, Brazil, Denmark, Mexico, Norway, Sweden, South Korea, and Singapore have a limit of US$60 billion, except for Denmark, Norway, and New Zealand that have a limit of US$30 billion. The agreement will last for six months.
The Fed's action came after they made a swap agreement with central banks of Europe, England, Canada, Japan, and Switzerland to prevent tightening of dollar supply after investors flocked to buy dollars amid concerns over a global recession due to the impact of Covid-19.
