June 25, 2020 / 5:29 AM / 9 days ago

PRECIOUS-Gold firm as mounting virus cases drive safe haven demand

    * IMF slashes its 2020 global output forecasts
    * Asian equities fall, dollar rises

 (Recasts, adds comment, update prices)
    By Brijesh Patel
    June 25 (Reuters) - Gold held firm on Thursday, after
hitting a nearly eight-year high in the last session, as an
upsurge in global coronavirus cases drove safe-haven buying.
    Spot gold        was up 0.3% at $1,765.94 per ounce at 0813
GMT, in sight of the peak of $1,779.06 reached on Wednesday,
which was its highest since October 2012.
    U.S. gold futures         rose 0.1% to $1,777.20.
    "Gold prices continue to be supported by the increase in
virus cases globally, raising doubts about the nature of the
economic recovery in progress," National Australia Bank
economist John Sharma said.
    Further lockdowns could also translate into the need for
further economic support, and in turn low interest rates, he
added.
    Gold, which pays no interest, tends to benefit when interest
rates fall as this reduces the opportunity cost of holding
bullion.
    Three U.S. states reported record increases in new cases on
Wednesday.             
    There has been a rise in infections elsewhere as well,
including in Brazil, Latin America and India, which is also the
world's second biggest bullion consumer.             
    Asian stock markets fell in response to the resurging cases
and an International Monetary Fund downgrade to economic
projections, driving inflows into the alternate safe haven
dollar.                                
    Gold recovered after some selling earlier in the Asian
session, which was attributed to profit-taking from Wednesday's
strong rally.
    "Any short-term correction is likely to be a slow grind
lower, and not a rush for the exit doors," said Jeffrey Halley,
senior market analyst at OANDA.
    Gold has jumped more than 16% this year so far.
    Physical demand, however, from jewellery consumption is
likely to remain modest, limiting further increases in prices,
the National Australia Bank's Sharma said.
    Palladium        jumped 0.9% to $1,880.83 per ounce,
platinum        gained 0.5% to $803.97 and silver        rose
0.5% at $17.360.

 (Reporting by Brijesh Patel in Bengaluru; Editing by Rashmi
Aich and Barbara Lewis)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below