Gold Edges Higher As Virus Woes Eclipse Vaccine Optimism
Gold prices edged up on Thursday, after dropping over 1% in the previous session, as concerns over the economic fallout from surging COVID19 cases outweighed positive development around a vaccine.
- Last Updated: November 12, 2020, 15:15 IST
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Spot gold rose 0.2% to $1,868.81 per ounce by 0549 GMT, while U.S. gold futures were 0.3% higher at $1,866.30 per ounce.
“Gold traders are trying to strike a balance between a positive vaccine news and a rising number of coronavirus cases around the globe,” said Margaret Yang, a strategist with DailyFx, which covers currency, commodity and index trading.
Although the vaccine may affect the medium-to-long-term trends of gold prices, monetary and fiscal stimulus are needed in the near-term to shelter the global economy, Yang said.
European Central Bank President Christine Lagarde signalled further support for the economy on Wednesday as the pandemic intensified in Europe, with cases expected to spike with the onset of winters.
Gold tends to benefit from widespread stimulus measures from central banks because it is considered a hedge against inflation and currency debasement.
Risk appetite has been boosted by hopes of a successful vaccine, but analysts say it may take a long time before one becomes publicly available.
“Gold finds itself in no man’s land now, hemmed in by support and resistance at $1850.00 and $1880.00 an ounce,” Jeffrey Halley, senior market analyst at OANDA, wrote in a note.
“An extension of losses to $1800.00 an ounce is still the most likely outcome.”
The dollar index held steady near a one-week high hit on Wednesday.
Silver fell 0.3% to $24.18 an ounce. Platinum rose 0.2% to $866.64 and palladium climbed 1.7% to $2,353.38.
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