Gold Gains With Fed Flagging Risk From Virus and Dollar Dropping

Spot gold climbed after the Federal Reserve repeated a vow to use all its tools to support the U.S. economy and warned that the resurgent coronavirus is weighing on the outlook.

The central bank, which left its benchmark interest rate unchanged near zero, also said it will extend emergency measures including temporary liquidity swap lines to ensure the global financial system has access to a ready supply of U.S. dollars. The dollar fell, and bullion headed for its ninth straight gain, the longest run since 2011.

Gold is on course for its biggest annual increase in more than a decade, driven by concern over the coronavirus pandemic and damage to economies, with gains supported by negative real yields and a weaker dollar. In remarks after the statement was released, Fed Chair Jerome Powell warned the U.S. faces the most severe economic downturn “in our lifetime,” with the path forward for the economy “extraordinarily uncertain.”