By Kim Khan
Gold rallied Monday as its appeal to hold rose amid a plunge in interest rates and a decline in the dollar.
Gold futures gained 1.8% to $1,595.20. Spot gold rose 0.6% to $1,594.77.
Gold, which has no yield, becomes more attractive when interest rates fall and markets are now pricing a sharp decline in borrowing costs. The 2-year Treasury yield fell to 0.814%, levels not seen since 2016.
Goldman Sachs (NYSE:GS) predicted the fed funds rate would be lower by a full point at the end of the second quarter. Fed funds futures see the Federal Reserve cutting rates down to 0.5% to 0.75% by the end of the year.
The dollar index was off 0.7% to 97.45.
