Gold steadies above $1,800 on rising virus fears, US-China tensions - GulfToday

Gold steadies above $1,800 on rising virus fears, US-China tensions


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Gold prices edged higher on Wednesday to hold firm above the psychological level of $1,800, as worries over surging coronavirus cases and simmering US-China tensions cemented demand for the safe-haven metal.

Spot gold was up 0.1% at $1,808.85 per ounce by 0453 GMT. US gold futures eased 0.2% to $1,808.90.

"Demand appears firm for gold on any dips to the $1,800 regions for now, with investors hedging COVID-19 risks, especially after the renewed lockdown in California," said Jeffrey Halley, a senior market analyst at OANDA.

Although the mood on Wall Street turned upbeat, the record amounts of loan loss provisions from banks overnight and comments from the Federal Reserve are a cause of concern for bullish investors, Halley added.

Federal Reserve officials warned that the US economy faces a longer recovery from the pandemic, and economic pain could still worsen as cases surge across the country, leading many states to temporarily halt the reopening of their economies. 


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Adding to worries over economic recovery, US President Donald Trump signed an executive order ending preferential treatment for Hong Kong and also shut the door on "Phase 2" trade negotiations with China.

The resultant boost to safe-haven demand helped gold maintain its positive trajectory despite a strong rally in US stocks overnight.

Reflecting increased investor interest in gold, holdings of SPDR Gold Trust rose 0.2% to 1,206.89 tonnes on Tuesday, their highest since April 2013.

The Bank of Japan kept monetary policy steady on Wednesday.

On the technical side, a bullish target of $1,831 per ounce has been resumed for spot gold, as it seems to have continued its uptrend, said Reuters technical analyst Wang Tao.

Elsewhere, palladium rose 0.7% to $1,971.89 per ounce, platinum fell 0.1% to $825.42 and silver edged 0.1% lower to $19.19.


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