Gold Rises More Than 1% On Stimulus Bets And Economic Woes
Gold regained some lost ground on Tuesday after a sharp fall in the previous session as concerns over global economic recovery and expectations of further fiscal and monetary stimulus offered support to the safehaven metal.
- Last Updated: November 10, 2020, 21:24 IST
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Gold regained some lost ground on Tuesday after a sharp fall in the previous session as concerns over global economic recovery and expectations of further fiscal and monetary stimulus offered support to the safe-haven metal.
Spot gold was up 1.1% at $1,882.86 an ounce by 0938 EST (1438 GMT). U.S. gold futures rose 1.4% to $1,879.70.
“Gold is trying to find equilibrium this morning, 24 hours after the Pfizer earthquake rearranged the landscape. I expect gold will continue to grind back higher, but it’s going to take a bit longer,” said Tai Wong, head of base and precious metals derivatives trading at BMO.
“The fundamental factors for gold remain quite friendly. Stimulus is on the cards and with a vaccine we will get reflation.”
Gold lost more than 4.5% on Monday, its biggest daily fall since Aug. 11, after U.S. drugmaker Pfizer Inc said its COVID-19 vaccine was more than 90% effective based on initial trial results, lifting U.S. equities to record highs.
“The fiscal and monetary response to the pandemic globally will remain highly accommodative. This will continue to provide gold and silver, as well as platinum, with reason to go higher,” HSBC analysts said in a note.
“But the psychological relief and shift in risk sentiment may still weigh on gold and the other metals, with the exception of palladium, in the immediate term.”
Gold tends to benefit from stimulus spending because it is considered a hedge against inflation risks and currency weakness.
Elsewhere, silver gained 1% to $24.30 an ounce, platinum edged up 0.1% to $867.29 and palladium was down 0.8% at $2,456.81.
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