Gold gains as fresh China virus fears offset strong US data
· Gold edged up in seesaw trade on Tuesday as concerns over a fresh coronavirus outbreak in China countered pressure from a surge in Wall Street driven by a record rise in U.S. retail sales and optimism over a COVID-19 drug.
· Spot gold rose 0.09 % to $1,726.17 per ounce. U.S. gold futures settled 0.5% up at $1,736.50.
· Raising concerns over the pandemic, Beijing’s city government on Tuesday raised its COVID-19 emergency response level to II from III, according to state media.
· “Gold is gaining after Beijing suddenly tightened the measures, with schools shut and people advised not to leave the city unless necessary,” said Alex Turro, market strategist at RJO Futures.
· Driving initial declines in safe-haven gold, Wall Street surged after a Commerce Department report showed overall retail receipts rose 17.7% last month, the biggest advance on record.
· Equities also found support from data showing reduced COVID-19 death rates in a trial of a generic steroid drug.
· “Every time the (gold) price falls, it seems that investors are seeing it as a buying opportunity,” ActivTrades chief analyst Carlo Alberto De Casa said in a note.
· Global coronavirus cases reached more than 8 million on Monday, as infections surged in Latin America and the United States.
· The fundamentals for gold are strong, given the low interest rates environment and uncertainty over the pandemic, RJO Futures’ Bob Haberkorn said.
· Adding to a list of global central bank stimulus measures, the Bank of Japan said it expected to pump around 110 trillion yen ($1 trillion) via its market operations and lending facilities.
· Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
· Palladium gained 0.7% to $1,921.33 per ounce, having earlier hit its highest since June 10 at $1,965.21, while platinum rose nearly 1% to $819.22.
· Silver was little changed at $17.42.
Reference: CNBC
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