Gold on the rise as investors move to safe havens as virus surges

The US has exceeded 3-million infections, with about 1.3-million of them recovered, while cases also grow worldwide. Adding to the economic worries, US Fed officials expressed concern that the surge threatened to pinch consumer spending and job gains.

The European Commission also forecast the eurozone would drop deeper into recession this year. However, in the medium to longer term, an improvement in the economic backdrop could weigh on gold, Julius Bär analyst Carsten Menke said in a note, pointing out that safe-haven demand has been the strongest in countries hit the hardest, such as the US and the UK.

Mirroring appeal for the metal, prices of which have rallied more than 18% so far this year, gold-backed exchange-traded funds added 104 tonnes of bullion worth $5.6bn in June, the World Gold Council said on Tuesday.

“The health, financial and economic uncertainties generated by the Covid-19 pandemic and its aftermath are likely to continue to support gold’s rally well into 2021, but at a reduced level,” HSBC analysts said in a note.

Palladium fell 0.7% to $1,902.17 an ounce, platinum fell 0.6% to $830.21 an ounce and silver rose 0.5% to $18.38 an ounce.

Reuters