July 1, 2020 / 10:33 AM / a month ago

PRECIOUS-Gold hits 8-year peak on mounting virus concerns

    * U.S. records biggest one-day spike in COVID-19 cases 
    * SPDR gold ETF holdings at over 8-year peak
    * Interactive graphic tracking global spread of coronavirus:
open
tmsnrt.rs/3aIRuz7 in an external browser.

 (Updates prices)
    By Nakul Iyer
    July 1 (Reuters) - Gold prices rose to their highest in
nearly eight years on Wednesday as a spike in coronavirus cases
sparked concerns over the economic recovery from the pandemic
and boosted demand for safe-havens.  
    Spot gold        hit its highest since early October 2012 at
$1,788.96 in early trade, and was little changed at $1,779.95
per ounce by 1205 GMT. U.S. gold futures         fell 0.4% to
$1,794.00 per ounce.
    "Uncertainty about the coronavirus, particularly in the
U.S., which could put the brakes on an economic recovery, and
the ultra-loose monetary policy of central banks are giving
support to gold," said Commerzbank analyst Daniel Briesemann.
    A rise in negative-yielding global bonds was also adding to
the metal's appeal, he said. Lower bond yields reduce the
opportunity cost of holding non-interest bearing gold.
    But with investment demand likely to be higher than
jewellery consumption this year, especially with practically no
physical demand in Asia, gold's price gains are "somewhat
fragile", he added.         
    The United States recorded its biggest one-day spike in
COVID-19 cases since the start of the pandemic on Tuesday, with
the government's top infectious disease expert warning that
infections could double.                         
    However, keeping a lid on gold's gains, the U.S. dollar
steadied close to a near one-month high. A stronger dollar makes
holding gold more expensive for other currency holders.         
    Reflecting high investor demand, holdings in the world's
largest gold-backed exchange-traded fund, SPDR Gold Trust      ,
increased by 211.9 tonnes, or nearly 22%, in the second quarter.
             
    "Technically the situation remains firmly bullish with
investors betting on further (money) printing activity from
central banks," said ActivTrades chief analyst Carlo Alberto De
Casa.
     CME Group         said it would expand delivery options for
its new gold contract to include vaults in London as well as in
New York after disruption to supply routes caused havoc in gold
markets earlier this year.             
    Palladium        was down 0.6% at $1,918.24 per ounce, while
platinum        fell 0.4%, to $813.14 per ounce and silver
       rose 0.3% to $18.19 per ounce.

 (Reporting by Nakul Iyer in Bengaluru; Editing by Jan Harvey,
Kirsten Donovan)
  
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