Gold firms on coronavirus resurgence

GOLD prices rose yesterday underpinned by concerns of a worsening Covid-19 pandemic, while hopes for a new US stimulus package before the November presidential election also supported prices of the precious metal.

Spot gold gained 0,6 percent to US$ 1 909,90 per ounce by 9:25am, while US gold futures were up 0,3 percent at $1 912,40.

“The resurgence of Covid-19 in Europe has increased the possibility of a double dip recession and a protracted economic slowdown,” said Harshal Barot, a senior research consultant for South Asia at Metals Focus.

“Slowing economic growth will mean that we would see more monetary and fiscal stimulus down the line.”

Gold, widely viewed as a hedge against inflation and currency debasement, has risen about 25 percent this year as governments and central banks unleashed a wave of stimulus measures to limit economic damage from the pandemic.

Worldwide coronavirus cases crossed 40 million yesterday, according to a Reuters tally, while much of Europe enacts new restrictions to curb the outbreak.

“We expect gold to trade cautiously around US$ 1 900 level for now, the game changer being whether we can get ( US) fiscal stimulus in the next 48 hours,” said Howie Lee, an economist at OCBC Bank.

US House Speaker Nancy Pelosi said on Sunday that differences remained with the Trump administration on a wide-ranging relief package but that she was optimistic legislation could be pushed through before election day.

However, she acknowledged an agreement would have to come within 48 hours for that to happen.

Elsewhere, silver climbed 2,4 percent to US$ 24,74, having hit near one-week peak.

Citi in a note said it expects silver prices to rally to US$ 40 over the next 12 months, on the back of sustained investor demand and a recovery in industrial consumption during 2021.

Platinum rose 1,2 percent to US$ 870,69 per ounce and palladium was 0,9 percent higher at 2 351,94. — Reuters.