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Home / Business News / Gold rises towards nine-year peak as virus cases spike

Gold rises towards nine-year peak as virus cases spike

Gold firmed above the key $1,800 level on Thursday just shy of a near nine-year peak on growing fears that surging coronavirus cases will put the brakes on a global economic recovery, with focus shifting to U.S. jobs data later in the day.

business Updated: Jul 09, 2020 18:50 IST
Reuters
Reuters
Reuters
Spot gold was up 0.2% at $1,814.53 per ounce by 0921 GMT. It climbed to its highest since September 2011 at $1,817.71 on Wednesday. U.S. gold futures were 0.2% higher at  $1,823.60.
Spot gold was up 0.2% at $1,814.53 per ounce by 0921 GMT. It climbed to its highest since September 2011 at $1,817.71 on Wednesday. U.S. gold futures were 0.2% higher at $1,823.60.(File photo for representation)

Gold firmed above the key $1,800 level on Thursday just shy of a near nine-year peak on growing fears that surging coronavirus cases will put the brakes on a global economic recovery, with focus shifting to U.S. jobs data later in the day.

Spot gold was up 0.2% at $1,814.53 per ounce by 0921 GMT. It climbed to its highest since September 2011 at $1,817.71 on Wednesday. U.S. gold futures were 0.2% higher at $1,823.60.

“The combination of global central bank easing, geopolitical risks, the persisting pandemic impact and global recession could continue to push gold prices higher in the medium term,” said Bank of China International analyst Xiao Fu.

But the analyst also said: “There’s volatility ahead ... There could be some better economic data or (signs economies are) returning to normal, it could slow down the rally to certain extent.”

Global coronavirus cases exceeded 12 million on Wednesday, with more than half a million dead. In the United States alone, cases have been on the rise in 42 of the 50 states over the past two weeks, according to a Reuters analysis.

Keeping alive worries over the economic fallout, U.S. Federal Reserve officials on Wednesday suggested the recovery in the world’s largest economy may be stalling.

Meanwhile, Britain’s finance minister promised an additional $38 billion to head off an unemployment crisis.

Stimulus tends to boost gold, which is considered a hedge against inflation and currency debasement.

Providing further support to gold, the dollar traded near multi-week lows. Gold gained ground even though European stocks rose after software group SAP signalled a rebound in its business.

“For as long as COVID-19 stimulates concerns around another round of lockdowns and slowing global growth, gold may remain in fashion despite rising stock markets,” said FXTM analyst Lukman Otunuga.

Among other metals, palladium climbed 1.4% to $1,943.57 per ounce, and silver gained 1.2% to $18.99, while platinum was 0.9% higher at $851.31.

ht epaper

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