By Gina Lee
Investing.com - Gold prices in Asia rose Tuesday morning, staying firmly above the $1,5000 mark as the U.S. Federal Reserve announced further steps to combat the COVID-19 pandemic.
Gold Futures were up 1.7% to $1,594.20 by 9:32 PM ET (1:32 AM GMT) as the Fed announced unprecedented measures to buy unlimited amounts of Treasury bonds and mortgage-backed securities.
The measures keep borrowing costs at low levels and gives the yellow metal, which pays no interest, a boost.
The Fed also pledged to finance households, small businesses and employers as the U.S. Senate failed to pass a stimulus package worth over $1 trillion on Monday afternoon.
“The Fed unveiled its biggest cannon seen to date - even bigger than in the great financial crisis,” Tai Wong, BMO head of base and precious metals derivatives trading, told Reuters.
“The market reacted instantly with equities and gold soaring behind the Fed’s new ‘Draghi’ approach. However, the acid test here is whether this optimism will hold for more than one day.”