July 1, 2020 / 4:13 AM / 2 days ago

PRECIOUS-Gold climbs to near 8-year peak as growing virus fears lift demand

    * Equities up as strong data drives rebound hopes
    * Spot gold may test resistance at $1,789/oz-technicals
    * Interactive graphic tracking global spread of coronavirus:
open
tmsnrt.rs/3aIRuz7 in an external browser.

 (Updates prices)
    By Brijesh Patel
    July 1 (Reuters) - Gold rose to its highest in nearly eight
years on Wednesday, as demand for the safe-haven metal was
boosted by worries about the global economic impact of surging
coronavirus infections in many countries.
    Spot gold        was up 0.4% at $1,788.06 per ounce by 0743
GMT, its highest level since early October 2012.
    U.S. gold futures         rose 0.4% to $1,807.10.
    "Gold as a bond alternative and as a general hedge is still
dominant. The macro-factor driving this right now is that there
is still a high degree of uncertainty about global growth
outlook going forward," said IG Markets analyst Kyle Rodda.
    "On top of this, while inflation expectations have picked-up
a little, markets are betting that policymakers will continue to
do what they can to suppress yields in order to stimulate
economies and support financial conditions."
    Lower bond yields reduce the opportunity cost of holding
non-interest bearing gold.
    A spike in U.S. coronavirus cases in the recent days has
cast a shadow on hopes for a quicker economic recovery, driving
inflows into safe-haven assets.             
    U.S. Treasury Secretary Steven Mnuchin and Federal Reserve
Chairman Jerome Powell pledged to do more for the economy as it
battles the impact of a pandemic that has infected more than
10.48 million people worldwide so far.                          
    However, recent better-than-expected economic readings
provided some relief to nervous investors, supporting demand for
Asian equities.            
    Focus now shifts to the U.S. Institute for Supply
Management's purchasing managers' index (PMI) for manufacturing
due later in the day.
    On the technical front, spot gold may test a resistance at
$1,789 per ounce, a break above which could lead to a gain into
$1,795-$1,806 range, Reuters technical analyst Wang Tao said.
        
    Elsewhere, palladium        eased 0.1% to $1,927.87 per
ounce, while platinum        rose 1.2% to $826.23 and silver
       gained 0.9% at $18.28.

 (Reporting by Brijesh Patel in Bengaluru; Editing by Rashmi
Aich & Simon Cameron-Moore)
  
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