April 15, 2020 / 3:21 AM / 4 months ago

PRECIOUS-Gold slips as investors lock in profits, recession fears cap losses

 (Updates prices)
    * Gold poised to reach $1,800/oz - analyst
    * Global economy may shrink by 3% in 2020 - IMF
    * SPDR Gold Holdings rise to highest since May 2013
    * Interactive graphic tracking the global spread: open tmsnrt.rs/3aIRuz7
 in an external browser

    By Asha Sistla
    April 15 (Reuters) - Gold prices fell on Wednesday as
investors locked in profits after the metal rallied to a more
than seven-year high in the previous session, but fears of a
deep global economic recession due to the coronavirus pandemic
limited losses.
    Spot gold        was down 0.7% at $1,715.02 per ounce, as of
0643 GMT. In the previous session, it jumped as much as 1.9% to
its highest since Nov. 2012 at $1,746.50. 
    U.S. gold futures        fell 1.1% to $1,748.60.
    "Gold is consolidating gains at the top of its range … but
there's so much uncertainty in the world and so much of
conflicting information that's also supportive for gold," said
Jeffrey Halley, a senior market analyst at OANDA.
    There was some profit-taking in gold, Halley said, adding
"stocks and gold have been pumped to these levels by the recent
$2 trillion of extra stimulus announced by the U.S. Federal
Reserve".             
    Demand for gold tends to benefit from widespread stimulus
from central banks, as it is often seen as a hedge against
inflation and currency debasement. Lower interest rates also cut
the opportunity cost of holding non-yielding bullion.
    Asian shares paused near one-month highs, as warnings of a
deep recession dampened investor optimism that the slowing
spread of the coronavirus could allow businesses to re-open.
           
    While the top infectious disease adviser of U.S. President
Donald Trump said the May 1 target for restarting the economy is
"overly optimistic", the Fed was grappling with the challenge of
how to re-open the economy, having launched a funding backstop.
                                      
    The retreat from riskier assets followed the International
Monetary Fund's prediction that the global economy may shrink by
3% in 2020 due to the pandemic, in the worst downturn since the
Great Depression.             
    The contagion, which has infected more than 1.9 million
people and killed 120,670, has forced countries to shut activity
and prompted central banks to unleash unprecedented support
measures.                           
    Gold exchange traded funds continued to see inflows, with
holdings of the world's largest gold-backed ETF, SPDR Gold Trust
      now near its highest since May 2013, at 1,017.59 tonnes.
         
    Elsewhere, palladium        edged 0.1% higher to $2,220.20
per ounce.  
    "We continue to expect the palladium market to be
undersupplied this year and next year, despite latest industry
expectations for auto sales to plummet by at least 14%,"
Standard Chartered Bank analysts said in a note, adding the
auto-catalyst metal will be supported above $2,000 "for now".  
    Silver        dropped 1.6% to $15.55, while platinum       
advanced 0.8% to $780.93.

 (Reporting by Asha Sistla in Bengaluru; Editing by Arun Koyyur
and Sherry Jacob-Phillips)
  
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