Gold price hits highest in over a month as rise in virus cases bolsters appeal

Gold prices hit their highest level in more than a month on Monday as a resurgence of coronavirus infections in some countries raised doubts about a swift global economic recovery.

Spot gold was up 0.3% at $1,748.05 per ounce by 1151 GMT, after rising to as high as $1758.35 earlier in the session, its highest level since May 18. Photo: PTI

Gold prices hit their highest level in more than a month on Monday as a resurgence of coronavirus infections in some countries raised doubts about a swift global economic recovery. Spot gold was up 0.3% at $1,748.05 per ounce by 1151 GMT, after rising to as high as $1758.35 earlier in the session, its highest level since May 18.

U.S. gold futures was also 0.3% higher, at $1,758.10. Spot prices are now $17 shy of a 7-1/2 year high of $1,764.55, hit last month.

Gold is seen as a safe haven during times of economic turmoil and benefited as global investors were unnerved after the World Health Organization reported a record jump in global infections of the coronavirus on Sunday, with the biggest increases seen in North and South America.

TRENDING NOW

See Zee Business Live TV streaming below:

Two U.S. Federal Reserve officials on Friday warned the unemployment rate could rise again if the disease is not brought under control.

As well as concerns about the health of the global economy, there are also worries about rising inflation, said UBS analyst Giovanni Staunovo.

"There seems to be some increase in inflation expectations which is pushing real rates lower and giving some support to the gold price," Staunovo said.

The rise in coronavirus cases also pressured European shares.

Against a basket of currencies, the dollar index was down 0.2%, making gold cheaper for holders of other currencies.

Gold prices have risen 15% this year amid fears of a coronavirus-induced economic slowdown and unprecedented stimulus measures from governments and central banks globally.

"Technically a clear breakup of the previous high in May would open space for a further rally ... The price is expected to find support firstly at $1,741 and later at $1,730," ActivTrades chief analyst Carlo Alberto De Casa said in a note.

SPDR Gold Trust holdings on Friday rose 2% to 1,159.31 tonnes, the highest level since April 2013. Speculators increased bullish positions in COMEX gold and silver contracts in the week to June 16.

Silver rose 1.4% on Monday to $17.85 per ounce, its highest level in more than a week. Palladium inched 0.1% higher to $1,911.91, while platinum gained 1.9% to $820.89.

TAGS: