Gold holds close to near 8-year peak as virus cases spike

Gold holds close to near 8-year peak as virus cases spike

Gold prices steadied on Monday, within

striking distance of last week’s near eight-year high and on

track for their biggest quarterly rise in more than four years,

as a spike in global coronavirus cases unnerved investors.

Spot gold was little changed at $1,769.77 per ounce

by 1148 GMT, but only $9.30 shy of its highest since Oct 2012

hit last Wednesday.

U.S. gold futures rose 0.2% to $1,784.40 per ounce.

Cases of the coronavirus have soared in the United States,

with California ordering bars to close and Washington state

pausing plans for re-opening the economy. Infection rates also

remain on the rise in countries such as Brazil and India.

“The catalyst (for gold to reach $1,800 an ounce) is already

here. Rising cases in the U.S. and concerns about a second wave

in Europe and Asia are likely to slow down any potential rebound

in the economy and that’s going to make gold an asset class that

is very much in demand,” said Michael Hewson, chief market

analyst at CMC Markets UK.

He attributed Monday’s slight price decline to profit-taking

going into month and quarter end.

The relentless spread of the coronavirus has curbed optimism

for a swift recovery of the global economy, sending world shares

to a two-week low.

However, Stephen Innes, chief market strategist at financial

services firm AxiCorp said a lack of inflation posed a difficult

question for the gold rally.

“Given inflation is headed lower in both the short- and

medium-term, gold needs (real bond) yields to continue to fall

this year.”

SPDR Gold Trust , holdings rose 0.3% 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.

Palladium rose 1.6% to $1,889.65 per ounce, while

platinum gained 2.2% to $808.10 per ounce and silver

was up by 0.6% to $17.85 per ounce.

(Reporting by Nakul Iyer in Bengaluru; editing by David Evans,

Kirsten Donovan)

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