Gold gains as fresh virus wave looms over economic recovery

Reuters | New York 

The Daily Tribune - www.newsofbahrain.com

Gold prices rose on Tuesday as a weaker dollar and a fresh wave of coronavirus infections threatened to further slow down a global economic recovery from the COVID-19 pandemic, bolstering bullion’s safe-haven appeal.

Spot gold was 0.1% higher at $1,903.16 per ounce by 0801 GMT.

U.S. gold futures were steady at $1,906.50.

“The resurgence of COVID-19 is leading to a broader risk-off sentiment in global markets and this is supportive of safe-haven assets,” said Harshal Barot, senior research consultant for South Asia at Metals Focus.

“Investors are clearly not bearish on gold

Many countries, including the United States, Russia and France, are setting records for COVID-19 infections and forcing some of them to impose new restrictions, risking derailing any global economic recovery.

The dollar index dipped 0.1% against rivals, pressured by strong economic data out of China and South Korea, making the bullion cheaper for holders of other currencies.

Investors were, however, cautious ahead of the Nov. 3 U.S. elections, while negotiations over a new relief aid showed no signs of progress.

While U.S. House Speaker Nancy Pelosi expressed hope that an agreement can be reached before the elections, White House economic adviser Larry Kudlow told reporters on Monday that talks have slowed.

Gold tends to benefit from widespread stimulus measures from central banks because it is considered a hedge against inflation and currency debasement.

Elsewhere, palladium gained 1% to $2,374.88 per ounce, while platinum was up 0.9% at $877.34.

Palladium prices could test $2,600 by mid-2021 bolstered by market tightness and stimulus measures, UBS analyst Giovanni Staunovo said in a note.

Silver rose 0.5% to $24.44 per ounce.

at the moment... Long-term investors continue to hold gold amid the broader uncertainty, be it the U.S. elections or the pandemic,” Barot added.