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Gold soars to near 8-year high as fears of second virus wave grow

Brijesh Patel /Bengaluru
Filed on June 24, 2020
Spot gold was up 0.1 per cent at $1,768.50 per ounce as of 0448 GMT after touching $1,773, its highest level since October 2012 in early Asian trade. - Reuters

Gold up for fourth straight session.

Gold climbed to its highest level in nearly eight years on Wednesday, as safe-haven demand was boosted by worries over a surge in coronavirus infections and hopes of more stimulus measures to combat the economic blow.

Spot gold was up 0.1 per cent at $1,768.50 per ounce as of 0448 GMT after touching $1,773, its highest level since October 2012 in early Asian trade. US gold futures rose 0.2 per cent to $1,785.50.

"The fears of second wave cases, particularly in the US, and also in Latin America, are driving concerns about sustained weakness in the economic recovery and that's certainly supporting safe-haven assets like gold," said ANZ analyst Daniel Hynes.

"Continued support that central banks are likely to provide to the market with bond purchasing programmes and monetary easing will clearly keep the rates low for the foreseeable future."

Central banks worldwide have adopted aggressive stimulus measures and kept interest rates low, helping gold prices surge more than 16per cent this year, as the precious metal is widely seen as a hedge against inflation and currency debasement.

US Treasury Secretary Steven Mnuchin said the next stimulus bill will focus on getting people back to work quickly and he would consider a further delay of the deadline to file tax returns.

Several US states reported record infections and the death toll in Latin America passed 100,000 on Tuesday, a Reuters tally showed.

The European Union is prepared to bar travellers from the United States because of a surge in its cases, putting the country in the same category as Brazil and Russia, the New York Times said.

Also increasing gold's appeal, the dollar index hovered near a more than one-week low.

Elsewhere, palladium edged up 0.1per cent to $1,925.31 per ounce, while platinum dropped 0.5per cent to $825.01 and silver fell 0.5 per cent to $17.87. - Reuters

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