Gold Price Firm Near 1-Month High Amid Rising Coronavirus Cases
Gold prices held firm on Monday, having scaled a more than one-month peak, as a resurgence of coronavirus infections in many countries raised concerns over a swift global economic recovery. Spot gold rose 0.3 per cent to $1,747.59 per ounce by 3:33 pm. Prices were some $17 shy of a seven-and-a-half-year high of $1,764.55, hit in May. US gold futures rose 0.7% to $1,764.50 per ounce.
There are concerns over a second wave or a deterioration of the first wave in the United States and Europe and economies take a little longer to recover, said UBS analyst Giovanni Staunovo.
"There seems to be some increase in inflation expectations which is pushing real rates lower and giving some support to the gold price."
The World Health Organization reported a record jump in global infections on Sunday, with the biggest increase seen in North and South America.
Two Federal Reserve officials on Friday warned the unemployment rate could rise again if the disease is not brought under control.
The rise in coronavirus cases unnerved investors and weighed on European shares.
Against a basket of currencies, the dollar index was down 0.3 per cent, making gold cheaper for holders of other currencies.
Gold prices have risen 15 per cent so far this year, hitting a high since 2012 at $1,764.55 last month, amid fears of coronavirus-induced economic slowdown and unprecedented stimulus measures from governments and central banks globally.
"Technically a clear breakup of the previous high in May would open space for a further rally ... The price is expected to find support firstly at $1,741 and later at $1,730," ActivTrades chief analyst Carlo Alberto De Casa said in a note.
SPDR Gold Trust holdings rose 2 per cent to 1,159.31 tonnes on Friday, while speculators increased bullish positions in COMEX gold and silver contracts in the week to June 16.
Silver rose 1.6 per cent to $17.88 per ounce to its highest in more than a week. Palladium was steady at $1,910.65, while platinum gained 1.6 per cent to $818.25.
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