Gold pierces $1,800 barrier in run to 9-year peak as virus woes mount

Bengaluru - Investors hedging exposure to riskier assets because there's growing and widening belief that any recovery is unlikely to be V-shaped

Gold briefly breached $1,800 an ounce on Wednesday for the first time since 2011 as mounting fears over the fast global spread of the coronavirus sent investors scurrying for safe havens.
Spot gold had risen 0.3 per cent to $1,799.22 per ounce by 0854GMT, after hitting its highest since November 2011, at $1,800.18, earlier in the session.
US gold futures rose 0.2 per cent to $1,812.90 per ounce.
European shares opened lower as soaring Covid-19 cases dented hopes of a swift economic recovery.
"Investors are hedging their exposure to riskier assets simply because there's a growing and widening belief that any recovery is unlikely to be V-shaped," said Michael Hewson, chief market analyst at CMC Markets UK
"Markets generally tend to operate through a prism of optimism and that optimism is being tested at the moment and gold is benefiting from that."
The United States has exceeded three million infections, while cases also grew worldwide.
Adding to the economic worries, US Fed officials expressed concern that the surge threatened to pinch consumer spending and job gains.
The European Commission also forecast the eurozone would drop deeper into recession this year.
However, in the medium to longer-term, an improvement in the economic backdrop could weigh on gold, Julius Baer analyst Carsten Menke said in a note, pointing out that safe-haven demand has been the strongest in countries hit the hardest, such as the US and the UK.
Mirroring appeal for the metal, prices of which have rallied over 18 per cent so far this year, gold-backed exchange traded funds added 104 tonnes of bullion worth $5.6 billion in June, the World Gold Council said on Tuesday.
"The health, financial and economic uncertainties generated by the Covid-19 pandemic and its aftermath are likely to continue to support gold's rally well into 2021, but at a reduced level," HSBC analysts said in a note.
Palladium fell 0.7 per cent to $1,902.17 per ounce, platinum fell 0.6 per cent to $830.21 per ounce and silver rose 0.5 per cent to $18.38 per ounce.

• Gold and Forex