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· Gold rises as virus concerns lift safe-haven bid
· Gold prices rose on Monday as worries over a surge in fresh COVID-19 infections globally dented investor optimism about a swift economic rebound and drove investors towards the safe-haven metal.
Spot gold was up 0.2% at $1,773.43 per ounce by 0259 GMT. Prices were $5.63 shy of a near eight-year high of $1,779.06, hit last week.
U.S. gold futures rose 0.1% to $1,781.60.
· “Certainly the safe-haven buying is coming through fairly strong, with the fresh outbreak of coronavirus in the U.S., in particular, really driving that investor appetite at the moment,” said ANZ analyst Daniel Hynes.
· California ordered some bars to close on Sunday, following similar moves in Texas and Florida, as cases nationwide soar to record levels each day. Washington state and the city of San Francisco have paused re-opening plans.
Relentless spread of the coronavirus intensified investor fears about a delay in global economic recovery and weighed on risk appetite, driving inflows into safe-haven assets.
The outlook for a global economic recovery over the past month has worsened or at best stayed about the same, according to a firm majority of economists in Reuters polls.
Gold is used as a safe investment during times of political and financial uncertainty.
· Indicative of sentiment, SPDR Gold Trust, holdings rose 0.3% to 1,178.90 tonnes on Friday, while speculators increased their bullish positions in COMEX gold and silver contracts in the week to June 23.
· On the technical side, spot gold is poised to break a resistance at $1,778 per ounce and rise to $1,789, said Reuters technical analyst Wang Tao.
· Elsewhere, palladium gained 1.7% to $1,891.42 per ounce, while platinum rose 0.6% to $796 and silver climbed 0.7% to $17.88.
· KITCO | Wall St., Main St. look for goldprices to keep shining
“I think gold will look to re-challenge the recent high we just had because of the fact that I think U.S. equities are starting to show that they are susceptible to a decline,” said Phillip Streible, chief market strategist with Blue Line Futures.
“I think investors are going to reconsider their long equity positions, the strength of the recovery, a resurgence of the coronavirus and lockdowns. Due to that, I think people will shift back into the gold market.”
George Gero, managing director with RBC Wealth Management, said he looks for gold to continue building on its gains over the last three weeks, citing strong demand for exchange-traded products and a “dynamic” options expiration that resulted in less margin-call selling than some might have expected. He continues to look for gold to top $1,800 an ounce.
“Gold is still in bullish mode. The Fed is still showing signs of nervousness about the economy and that should favor gold,” said Phil Flynn, senior market analyst with at Price Futures Group, noting that while that while stress tests showed that the U.S. banking system is in OK condition, banks were ordered to suspend stock-buyback programs and limit dividend payments to shareholders.
“The banks must also submit new plans for maintaining enough of the capital needed to survive a downturn,” Fynn continued. “This kind of talk, along with record cases of the cornavirus, should make safe-haven buying in the yellow metal attractive again.”
Jim Wyckoff, senior technical analyst with Kitco, called for higher prices due to a “fully bullish” picture on the technical charts.
· Gold closes higher and is now closer to challenging $1800
Our technical studies have indicated that it’s not if but when gold will effectively trade and close above $1800 per ounce. This week gold closed at its highest trading value this year, but more impressively it reached a high not seen for the last 7 ½ years.
It seems highly likely that until the pandemic has run its course and the global economy returns to pre-pandemic numbers, that we will continue to see gold prices at this level or higher.