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Gold Price Moves Higher As COVID-19 Concerns Boost Safe-Haven Appeal

Gold prices rose on Monday as worries over a surge in COVID-19 infections globally dented optimism about a swift economic rebound, driving investors toward the safe-haven metal. Spot gold was 0.1 per cent higher at $1,772.30 per ounce by 0644 GMT (12:14 pm in India). Prices were $6.76 shy of a near eight-year high of $1,779.06 per ounce, hit last week. US gold futures rose 0.3 per cent to $1,786 per ounce.

“Certainly the safe-haven buying is coming through fairly strong, with the fresh outbreak of coronavirus in the US, in particular, really driving that investor appetite at the moment,” said ANZ analyst Daniel Hynes.

California ordered some bars to close on Sunday, following similar moves in Texas and Florida, as cases nationwide soar to record levels each day. Washington state and the city of San Francisco have paused re-opening plans.

The relentless spread of the coronavirus intensified investor fears about a delay in global economic recovery and weighed on risk appetite, driving inflows into safe-haven assets.

The outlook for a global economic recovery over the past month has worsened or at best stayed about the same, according to a firm majority of economists in Reuters polls.

“With COVID-19 cases rising in the U.S., real rates well into negative territory and stimulus ongoing, the environment remains conducive to a higher gold price,” MKS PAMP said in a note.

Reflecting increased investor interest in gold, holdings of SPDR Gold Trust rose 0.3 per cent on Friday, while speculators increased their bullish positions in COMEX gold and silver contracts in the week to June 23.

On the technical side, spot gold was poised to break a resistance at $1,778 per ounce and rise to $1,789, said Reuters technical analyst Wang Tao.

Elsewhere, palladium gained 0.7 per cent to $1,873.70 per ounce, while platinum rose 1.8 per cent to $805.57 and silver climbed 0.6 per cent to $17.85.

News Credit: NDTV.com