Gold remains firm as fears over rising Covid-19 cases offset brighter Chinese data

Bengaluru — Gold prices held steady near a nine-year peak on Thursday, as concerns over rising coronavirus cases and simmering US-China tensions offset some silver linings from Chinese economic data.

Spot gold crept 0.1% lower at $1,808.97/oz by 3.41am GMT but moved in a very tight range of about $5, just $8.74 shy of its highest since September 2011, at $1,817.71, hit last week.

US gold futures were mostly unchanged at $1,814.20. China’s economy grew 3.2% in the second quarter from a year earlier, data showed on Thursday, recovering from a record contraction as lockdown measures ended and policymakers stepped up stimulus.

But separate data showed that while the country’s industrial output beat expectations in June, retail sales unexpectedly fell again, pointing to waning consumer demand.

Michael McCarthy, chief strategist at CMC Markets, said the data was mixed out of China and gold’s elevated levels reflect ongoing concern from some segments of investors about the growth outlook for the rest of the year.

The positive readings from China failed to help risk sentiment, which was overshadowed by a growing Sino-US rift over the control of advanced technologies and civil liberties in Hong Kong.

Safe-haven gold has risen more than 19% so far in 2020, also benefiting from low interest rates and widespread stimulus as it’s seen as a hedge against inflation and currency debasement, though market participants were still divided on the outlook for inflation.

Investor focus now shifts to European Central Bank policy decision at 11.45am GMT.

Elsewhere, palladium was steady at $1,980.94/oz, while platinum lost 1% to $824.13 and silver fell 0.6% to $19.28.

Reuters