May 19, 2020 / 3:03 PM / 9 days ago

PRECIOUS-Gold gains as recession looms even as economies reopen

 (Updates prices)
    * Gold hovers below multi-year peak hit in previous session
    * Palladium to see smallest deficit since at least 2012-
report
    * For an interactive graphic tracking the global coronavirus
spread, open tmsnrt.rs/3aIRuz7 in an external browser

    By Asha Sistla
    May 19 (Reuters) - Gold rose on Tuesday amid uncertainty
over how economies would emerge from a deep slowdown, although
optimism about a potential vaccine for the novel coronavirus
capped bullion's advance.
    Spot gold        rose 0.7% to $1,743.25 per ounce by 2:34
p.m. ET (1834 GMT). U.S. gold futures         settled 0.6%
higher at $1,745.60.
    "Fundamentals for gold have never been better in history.
Unless we have more optimism about the vaccine, we will begin to
see an upward momentum to a new high," said Jeffrey Sica,
founder of Circle Squared Alternative Investments.
    "Any news of a setback in re-integration of businesses into
the economy will ultimately lead gold higher."
    Massive global stimulus to limit the economic damage from
the coronavirus have supported gold, since it is widely viewed
as a hedge against inflation and currency
debasement.                                                   
    Driving demand for safe havens, meanwhile, were fears of a
further deterioration in China-U.S. relations, with Nasdaq Inc
         set to unveil restrictions that will make it more
difficult for some Chinese companies to list there.             
    Wall Street traded mixed, having rallied in the previous
session after drugmaker Moderna          said its experimental
COVID-19 vaccine showed promising results in a preliminary
trial.     
    Monday's jump in equities and oil had caused gold to 
retreat from a multi-year peak.                         
    "Right now, the market is focused on the aftermath of the
big rally in stocks yesterday ... but the underlying demand has
not gone away," said Saxo Bank analyst Ole Hansen, adding a
weaker economic outlook, central bank measures and geopolitical
tensions should keep gold prices high.
    Elsewhere, palladium        was flat at $2,012.54 an ounce,
having hit a near one-month peak of $2,109.20.
    Platinum        jumped 2% to $834.65 and silver        rose
1.4% to $17.41.
    The global palladium market will see its smallest deficit
since at least 2012 this year, while platinum remains
significantly oversupplied, an industry report said.
            

 (Reporting by Asha Sistla and Brijesh Patel in Bengaluru;
Editing by Bernadette Baum and Alistair Bell)
  
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