June 13, 2024

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Delighting finance buffs

Gold ticks higher as coronavirus worries deepen

Gold edged higher on Wednesday as the rising coronavirus death toll hammered risk sentiment, while investors await the release of the U.S. Federal Reserve’s policy meeting minutes for clues on further stimulus measures.

Spot gold ticked up 0.1 per cent to $1,650.40 per ounce by 1030 GMT, after climbing to its highest since March 10 on Tuesday, at $1,671.40. U.S. gold futures rose 0.1 per cent to $1,685.90.

“Gold is relatively stable, the market is quite anxiously waiting for OPEC+ meeting results, which could go either way. On the other hand, we cannot say the pandemic in Europe and the U.S. have calmed or finished yet, there is still uncertainty,” said Bank of China International analyst Xiao Fu.

“People are also waiting for FOMC minutes to see whether there will be any indication for next round of stimulus, we’re in extremely volatile times and there could be some policy surprises.”

European stock markets snapped a two-day rally, as the coronavirus death toll rose in some of the worst-hit parts of the continent.

More than 1.38 million people have been reported infected by the novel coronavirus across the world and 81,451 have died, according to a Reuters tally.

New York state, the U.S. epicentre of the pandemic, reported its sharpest single-day jump in fatalities and Spain’s daily toll of deaths rose for the first time in five days.

The outbreak has prompted nations to extend lockdowns and roll out unprecedented fiscal and monetary stimulus to combat the economic damage.

Japanese Prime Minister Shinzo Abe on Tuesday declared a state of emergency to fight the outbreak and rolled out a near $1 trillion stimulus package to soften the economic blow.

“In the mid to long term, gold has upside due to quantitative easing and monetary stimulus efforts by global central banks,” said CMC Markets analyst Margaret Yang Yan.

However, safe-haven gains for the U.S. dollar have limited gold’s advance, with the dollar index up 0.2{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} against its rivals.

Markets are looking to the release at 1800 GMT of the minutes of the Fed’s latest meeting that might give more clues on the interest rate outlook.

Also on the radar is Thursday’s meeting of members of the Organization of the Petroleum Exporting Countries and its allies, including Russia, a group known as OPEC+, which could result in further output cuts to shore up oil prices that have tumbled amid the coronavirus pandemic.

Elsewhere, palladium climbed 0.7 per cent to $2,191.31 an ounce, while platinum gained 0.6 per cent to $738.15.

Silver rose 0.5 per cent to $15.08 an ounce, having touched a more than three-week high in the previous session.

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