April 30, 2020 / 10:15 AM / a month ago

PRECIOUS-Gold set for best month in 4 years as central banks unleash stimulus

 (Adds ECB statement, updates prices)
    * ECB keeps rates unchanged at policy meeting
    * U.S. Fed keeps interest rates near zero
    * Gold up more than 9% so far this month
    * For an interactive graphic tracking the global spread,
open tmsnrt.rs/3aIRuz7
 in an external browser

    By Brijesh Patel
    April 30 (Reuters) - Gold rose on Thursday en route to its
best month in four years as expectations of more monetary easing
from central banks and persistent worries over a global
recession lifted safe-haven demand. 
    Spot gold        was up 0.2% at $1,713.75 per ounce by 1202
GMT. U.S. gold futures         rose 1.1% to $1,732.10 per ounce.
    "The massive monetary support we are witnessing at the
movement is helping gold. Despite higher risk appetite, the gold
price until now stayed above $1,700 per ounce, although it did
come under pressure because of higher equity markets,"
Commerzbank analyst Eugen Weinberg said.
    "The U.S. Federal Reserve left interest rates unchanged and
it should stay there for sometime. Going forward, the
unprecedented monetary stimulus provided by the European Central
Bank and the Fed is likely to increase demand for gold."
    After unveiling a raft of stimulus measures over the last
six weeks, including plans to buy 1.1 trillion euros worth of
debt this year, the ECB left interest rates unchanged on
Thursday.             
    On Wednesday, the Fed kept interest rates near zero and
promised to expand emergency programmes as needed to help the
battered economy.             
    The U.S. economy contracted in the first quarter at its
sharpest pace since the Great Recession, while economists expect
an even sharper contraction in the second quarter.             
    Bullion has risen more than 9% so far this month, boosted by
a wave of stimulus measures from central banks to limit economic
damage from the coronavirus-outbreak.
    Lower interest rates reduce the opportunity cost of holding
non-yielding gold, which also tends to benefit from widespread
stimulus measures as it is often seen as a hedge against
inflation and currency debasement.
    "Investors remain confident about a relatively quick
solution to coronavirus, although it is now abundantly clear
that central banks will be forced to print a large amount of
money," ActivTrades chief analyst Carlo Alberto De Casa said in
a note.
    "From a technical point of view, a clear climb above the
resistance placed at $1,730-$1,735, which has already been
tested twice earlier this month, will create space for further
rallies in gold."
    However, positive trial results for a drug to treat the 
coronavirus boosted appetite for riskier assets, limiting gold's
advance.            
    Elsewhere, palladium        climbed 2.4% to $1,981.83 an
ounce, platinum        gained 0.5% to $778.19. Silver       
slipped 0.6% to $15.27 per ounce.
    

 (Reporting by Brijesh Patel in Bengaluru
Editing by Frances Kerry, Kirsten Donovan)
  
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