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Gold hovers near 8-year high as second coronavirus wave fears mount
· Gold prices climbed to its highest level in nearly eight years on Wednesday, as demand for the safe-haven asset was boosted by worries over a surge in coronavirus infections and hopes of more stimulus measures to combat the economic blow.
· Spot gold was up 0.2% at $1,769.76 per ounce as of 0234 GMT after touching $1,773, its highest level since October 2012 in early Asian trade.
U.S. gold futures rose 0.2% to $1,785.80.
· “The fears of second wave cases particularly in the U.S., and also in Latin America is driving concerns about sustained weakness in the economic recovery and that’s certainly supporting safe-haven assets like gold,” said ANZ analyst Daniel Hynes.
“Continued support that central banks are likely to provide to the market with bond purchasing programs and monetary easing will clearly keep the rates low for the foreseeable future.”
· Central banks across the globe have taken aggressive stimulus measures and kept interest rates low helping gold prices surge more than 16% this year, as the precious metal is widely viewed as a hedge against inflation and currency debasement.
· U.S. Treasury Secretary Steven Mnuchin said the next stimulus bill will focus on getting people back to work quickly and that he would consider a further delay of the tax filing deadline.
· Several U.S. states reported record infections and the death toll in Latin America passed 100,000 on Tuesday, according to a Reuters tally.
· The New York Times reported the European Union is prepared to bar U.S. travelers because of the surge of cases in the country, putting it in the same category as Brazil and Russia.
· Also helping gold’s appeal, the dollar index hovered near a more than one-week low.
· KITCO | Gold bulls challenge springtime highs, gaining power
Technically, August gold futures prices were nearer the session high near midday and poised to close at a 7.5-year high close. The bulls have the solid overall near-term technical advantage and have momentum to push to a new for-the-move high soon. Gold bulls' next upside near-term price objective is to produce a close above solid technical resistance at the April high of $1,789.00. Bears' next near-term downside price objective is pushing prices below solid technical support at $1,750.00. First resistance is seen at $1,789.00 and then at $1,800.00. First support is seen at today’s low of $1,758.30 and then at this week’s low of $1,753.50. Wyckoff's Market Rating: 8.5
· Elsewhere, palladium edged up 0.1% to $1,926.06 per ounce, platinum dropped 0.4% to $825.59 and silver fell 0.4% to $17.89.
Reference: CNBC, Kitco