By Bryan Wong

Investing.com- Gold was up on Friday morning in Asia, continuing its record-setting climb powered by a weak dollar and low interest rates.

Gold futures climbed 1.10% to $1,963.60 by 12:04 PM ET (5:04 AM GMT).

Gold prices are likely to be supported for quite some time by low interest rates, particularly in the U.S., where the Federal Reserve’s Open Market Committee decided on Wednesday to keep its benchmark interest rates steady at near zero.

Weakness in the dollar is also pushing gold up. The greenback was down again on Friday morning after the U.S. reported that its economy shrank in the second quarter by 32.9%, the biggest contraction since at least the Second World War.

Gold’s climb is further boosted by the continued deadlock of negotiations for a new pandemic-related stimulus package in the U.S.

Goldman Sachs (NYSE:GS) forecast earlier this week that gold prices could hit $2,300 but some analysts say the yellow metal’s relentless climb could be stopped by any sign of a solution to the the COVID-19 pandemic, such as a vaccine.

“A swift rolling out of a Covid-19 vaccine, which sees economies around the world reopening at a quicker pace, and returning to a form of normality, would likely provide a boost to risk assets, and as a result, weigh on havens, such as gold,” Warren Patterson, head of commodities strategy at ING Groep (AS:INGA) NV, told Bloomberg.

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