Gold Prices Gain As Coronavirus Cases Surge

Gold prices rose on Tuesday after a fresh wave of coronavirus infections raised concerns over a global economic recovery and bolstered the precious metal’s safe-haven appeal.

Spot gold gained 0.3% to $1,908.02 per ounce by 0321 GMT.

U.S. gold futures were up 0.3% at $1,911.20.

“With rising virus cases globally, especially in the west, gold’s appeal as a safe haven is coming to the fore,” said Howie Lee, economist at OCBC Bank.

However, gold is likely to stay close to the $1,900 level until the U.S. presidential election outcome becomes clearer, Lee added.

Many countries, including the United States, Russia and France, are setting records for COVID-19 infections and forcing some of them to impose new restrictions.

Uncertainty over fresh U.S. stimulus has kept gold trading in a range over the past few weeks, with the metal now about 8% away from a record high of $2,072.50 hit in August.

While U.S. House Speaker Nancy Pelosi expressed hope that an agreement can be reached on the coronavirus relief package before the elections, White House economic adviser Larry Kudlow told reporters on Monday that talks have slowed.

Gold, widely viewed as a hedge against inflation and currency debasement, has gained about 26% this year boosted by unprecedented stimulus measures from central banks and governments globally to blunt the economic hit of the pandemic.

“Gold is still looking for that elusive inflationary spark,” Stephen Innes, chief global market strategist at Axi said in a note.

Also supporting gold, the U.S. dollar dipped 0.1% against a basket of currencies. [USD/]

On the technical front, spot gold may end its bounce around a resistance at $1,912 per ounce and then retest a support at $1,887, according to Reuters technical analyst Wang Tao.

Silver climbed 0.7% to $24.48 per ounce. Platinum rose 0.7% to $876.05 and palladium gained 0.3% at $2,358.77.

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