Gold price steadies on Coronavirus fears, stimulus bets; Fed meet eyed

Gold prices steadied on Wednesday as worries over rising cases of COVID-19 and expectations of possible inflation from more stimulus measures underpinned the metal.

Spot gold was little changed at $1,957.84 per ounce by 0049 GMT. Prices hit an all-time of $1,980.57 on Tuesday before retreating after investors booked profits and the dollar regained some ground. Photo: PTI

Gold prices steadied on Wednesday as worries over rising cases of COVID-19 and expectations of possible inflation from more stimulus measures underpinned the metal, while investors awaited the U.S. Federal Reserve`s meeting outcome later in the day. Spot gold was little changed at $1,957.84 per ounce by 0049 GMT. Prices hit an all-time of $1,980.57 on Tuesday before retreating after investors booked profits and the dollar regained some ground.

U.S. gold futures rose 0.5% to $1,954.50. A Reuters tally showed more than 16.62 million people were infected with COVID-19, including 655,583 deaths. Cases continued to surge in the United States, with four states in the South and West reporting one-day records for virus-related deaths on Tuesday.

Underscoring the economic impact from the virus, data on Tuesday showed that U.S. consumer confidence fell more than expected in July.

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Market participants are now looking at the U.S. Fed`s two-day policy meeting, which ends on Wednesday.

Gold tends to gain when interest rates are low, which reduces the opportunity cost of holding non-yielding bullion. Gold is also seen as a hedge against inflation.

SPDR Gold Trust, the world`s largest gold-backed exchange-traded fund, said its holdings rose 0.7% to 1,243.12 tonnes on Tuesday.

Meanwhile, Republicans in the White House and the U.S. Congress were in disarray over their own plan for providing $1 trillion in new coronavirus aid, as negotiations aimed at reaching a compromise bill with Democrats also sputtered.

Asian equities pulled backed on Wednesday as an impasse in U.S. economic stimulus negotiations pushed global stocks lower.

Silver dropped 1.1% to $24.31 per ounce, platinum fell 0.1% to $947.29 and palladium slipped 1.1% to $2,259.52.

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