Tuesday, June 18, 2024
Home > Commodity > Gold edges above $1,800/oz, propped up by virus woes – The Economic Times

Gold edges above $1,800/oz, propped up by virus woes – The Economic Times


Gold prices inched up on Tuesday, rising above the $1,800 level, underpinned by concerns over mounting coronavirus cases globally and as many regions reintroduced curbs to restrict the outbreak.

Spot gold rose 0.2% to $1,805.83 per ounce by 10:42 am EDT (1442 GMT). U.S. gold futures fell 0.2% to $1,810.20.

“We are still bullish on gold, you have the same big macro factors out there, the (massive) stimulus, concerns about the virus, low interest rates,” said Michael Matousek, head trader at U.S. Global Investors.

Many parts of Asia are finding cause to pause the reopening of their economies as a jump in virus cases fans fears of a second wave, while California clamped new restrictions on businesses.

The World Health Organization (WHO) warned the pandemic would worsen if countries failed to adhere to strict precautions, as global cases surpassed 13 million.

“If rising COVID-19 cases in more and more countries renew lockdown measures across the globe, any hope of efficient recovery of economy will be disappointed,” Commerzbank analyst Carsten Fritsch said, adding this could prompt central banks and governments to unleash more liquidity.

Gold prices have risen nearly 19% so far this year, mainly benefiting from lower interest rates and widespread stimulus measures from major central banks as it is widely viewed as a hedge against inflation and currency debasement.

The S&P 500 and Nasdaq indexes fell in choppy trading as investors digested a mixed bag of quarterly earnings reports from U.S. banks, while restrictions in California weighed on technology stocks.

Investors were also wary of a growing rift between the United States and China over the South China Sea region, compounded by Beijing’s announcement that it will slap sanctions on Lockheed Martin for involvement in the latest U.S. arms sale to Chinese-claimed Taiwan.

Reflecting investor appetite for gold, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.3% to 1,203.97 tonnes on Monday.

Elsewhere, palladium eased 1.6% to $1,948.06 an ounce and platinum dipped 0.9% to $820.89.

Silver gained 0.1% to $19.11 per ounce, after hitting its highest since September 2019 on Monday.


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