May 11, 2020 / 4:08 AM / 22 days ago

PRECIOUS-Gold gains as new wave of infections stokes hopes of more stimulus

 (Updates prices)
    * Dollar firms, Asian equities move higher
    * Specs cut bullish positions in gold in week to May 5- CFTC
    * IMF warns Sino-U.S. trade war will weaken economic
    * For an interactive graphic tracking the global spread,
 in an external browser

    By K. Sathya Narayanan
    May 11 (Reuters) - Gold prices rose on Monday as bullion's
safe-haven appeal was boosted by worries about a new wave of
coronavirus infections, which reinforced expectations of more
stimulus measures and lower interest rates.
    Spot gold        gained 0.3% to $1,705.73 per ounce by 0742
GMT, having lost about 1% in the previous session. U.S. gold
futures         eased 0.3% to $1,708.
    "People have bought the dip. Even in the best of
circumstances, we are still in an environment where (interest)
rates are going to remain very low, fiscal policies are going to
remain very accommodative and inflation is going to be high,"
said IG Markets analyst Kyle Rodda.
    Gold is poised to strengthen in the longer term and
investors are trying to get their hands on the metal before it
rockets higher, he said, adding that there was a lot of
technical support around the $1,700 level.
    Gains in bullion were limited, however, as the dollar       
firmed and Asian shares rose, with investors looking ahead to
more countries restarting their economies, even as some reported
an unwelcome pickup in new coronavirus cases.                   
    "Gold requires a new fundamental trigger. Unless we get a
new trigger, like the U.S.-China trade war, we can expect a fall
towards $1,680," said Ajay Kedia, director at Kedia Commodities
in Mumbai.
     However, the decline would be small due to support from
concerns over a second wave of coronavirus infections in some
countries, recession worries and interest rate cuts, he said.
    Chinese authorities reported on Sunday what could be the
beginning of a new wave of virus cases in northeast China, while
South Korea warned of a second wave of new infections.
    On the Sino-U.S. trade front, the International Monetary
Fund on Friday warned Washington and Beijing against rekindling
a tariff war that could weaken recovery from the pandemic, while
signalling a possible downward revision of global economic
    Highlighting the impact of the pandemic, the U.S. economy
shed a record 20.5 million jobs in April, a Labour Department
report showed on Friday.             
    Americans should not expect a quick return to growth, U.S.
Federal Reserve officials said last week.             
    Speculators reduced their bullish positions in COMEX gold
contracts in the week to May 5, the U.S. Commodity Futures
Trading Commission (CFTC) said on Friday.                     
    Among other metals, palladium        rose 2% to $1,919.96 an
ounce, platinum        gained 0.6% to $769.93 and silver       
climbed 0.4% to $15.51.

 (Reporting by K. Sathya Narayanan in Bengaluru; Editing by
Subhranshu Sahu and Aditya Soni)
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