Gold rises as Covid-19 cases surge

Bengaluru — Gold prices rose on Tuesday after a fresh wave of coronavirus infections raised concerns over a global economic recovery and bolstered the precious metal’s safe-haven appeal.

Spot gold gained 0.3% to $1,908.02/oz by 3.21am GMT. US gold futures were up 0.3% at $1,911.20.

“With rising virus cases globally, especially in the West, gold’s appeal as a safe haven is coming to the fore,” said Howie Lee, economist at OCBC Bank.

However, gold is likely to stay close to the $1,900 level until the US presidential election outcome becomes clearer, Lee said.

Many countries, including the US, Russia and France, are setting records for Covid-19 infections and forcing some of them to impose new restrictions.

Uncertainty over fresh US stimulus has kept gold trading in a range over the past few weeks, with the metal now about 8% away from a record high of $2,072.50 hit in August.

While US house speaker Nancy Pelosi expressed hope that an agreement can be reached on the coronavirus relief package before the elections, White House economic adviser Larry Kudlow told reporters on Monday that talks have slowed.

Gold, widely viewed as a hedge against inflation and currency debasement, has gained about 26% this year boosted by unprecedented stimulus measures from central banks and governments globally to blunt the economic hit of the pandemic.

“Gold is still looking for that elusive inflationary spark,” Stephen Innes, chief global market strategist at Axi said in a note.

Also supporting gold, the US dollar dipped 0.1% against a basket of currencies.

On the technical front, spot gold may end its bounce around a resistance at $1,912/oz and then retest a support at $1,887, according to Reuters technical analyst Wang Tao.

Silver climbed 0.7% to $24.48 an ounce. Platinum rose 0.7% to $876.05 and palladium gained 0.3% at $2,358.77.

Reuters