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Gold rises as virus concerns lift safe-haven bid

Brijesh Patel /Bengaluru
Filed on June 29, 2020
Spot gold was up 0.2 per cent at $1,773.43 per ounce by 0259 GMT. Prices were $5.63 shy of a near eight-year high of $1,779.06, hit last week. - Reuters

Spot gold set to break resistance at $1,778/oz.

Gold prices rose on Monday as worries over a surge in fresh Covid-19 infections globally dented investor optimism about a swift economic rebound and drove investors towards the safe-haven metal.

Spot gold was up 0.2 per cent at $1,773.43 per ounce by 0259 GMT. Prices were $5.63 shy of a near eight-year high of $1,779.06, hit last week. US gold futures rose 0.1 per cent to $1,781.60.

Also see: Gold rates in UAE

"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.

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.

Gold is used as a safe investment during times of political and financial uncertainty.

Indicative of sentiment, SPDR Gold Trust , holdings rose 0.3 per cent to 1,178.90 tonnes 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 is poised to break a resistance at $1,778 per ounce and rise to $1,789, said Reuters technical analyst Wang Tao.

Elsewhere, palladium gained 1.7 per cent to $1,891.42 per ounce, while platinum rose 0.6per cent to $796 and silver climbed 0.7 per cent to $17.88. - Reuters


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