Gold stead­ies near record high on virus con­cerns

The Star Malaysia - StarBiz - - Foreign News -

MUM­BAI: Gold held steady near record highs yes­ter­day as wor­ries over global eco­nomic fall­out from mount­ing Covid-19 cases off­set an uptick in risk sen­ti­ment driven by pos­i­tive US eco­nomic data.

Spot gold was steady at US$1,976.19 per ounce by 0725 GMT, US$8.47 shy of the all­time high hit in the pre­vi­ous ses­sion. US gold fu­tures rose 0.4% to US$1,993.20.

“The coro­n­avirus prob­lem is go­ing to be with us for a while. It seems that economies around the world will be very frag­ile for an ex­tended pe­riod of time,” said Ed­ward Meir, an­a­lyst at ED&F Man Cap­i­tal Mar­kets.

“They (economies) would re­quire stim­u­lus, mone­tary eas­ing and lower in­ter­est rates to cush­ion the shocks. All of those would be ben­e­fi­cial for gold.”

Coro­n­avirus cases con­tinue to surge in the United States and else­where.

The World Health Or­gan­i­sa­tion warned that the road to nor­mal­ity would be long, with some coun­tries re­quir­ing a re­set of strat­egy.

Cen­tral banks around the world have rolled out a flurry of stim­u­lus mea­sures and cut in­ter­est rates to mit­i­gate the eco­nomic dam­age caused by the pan­demic, help­ing gold rise more than 30% so far this year as it is seen as a hedge against in­fla­tion and fears of cur­rency de­base­ment.

Mean­while, US law­mak­ers said they had made progress in talks on a new coro­n­avirus re­lief bill.

“What makes gold in­vest­ing so ap­peal­ing over the short-term or the medium-term per­spec­tive that when US real yields are lower or neg­a­tive, in­vestors have no op­por­tu­nity cost in own­ing bul­lion,” Stephen Innes, chief mar­ket strate­gist at fi­nan­cial ser­vices firm Ax­i­corp, said in a note.

Hold­ing back the metal, in­vestor ap­petite for riskier as­sets rose af­ter strong US man­u­fac­tur­ing data and gains in tech stocks.

Sil­ver gained 0.4% to US$24.34 per ounce, plat­inum rose 0.5% to US$921.26 and pal­la­dium climbed 0.8% to US$2,100.73. — Reuters

“They (economies) would re­quire stim­u­lus, mone­tary eas­ing and lower in­ter­est rates to cush­ion the shocks. All of those would be ben­e­fi­cial for gold.” Ed­vard Meir

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