June 23, 2020 / 3:21 PM / 12 days ago

PRECIOUS-Gold vaults to highest since October 2012 as dollar stumbles

    * Gold hit $1,768.96/oz earlier in the session
    * Dollar index        falls 0.5%
    * SPDR Gold Trust holdings at over 7-year high

 (Updates prices)
    By Diptendu Lahiri
    June 23 (Reuters) - Gold prices surged to their highest
since October 2012 on Tuesday, driven by weakness in the U.S.
dollar and widespread monetary stimulus packages by central
banks as a jump in coronavirus cases dented the economic
outlook.
    Spot gold        climbed 0.7% to $1,765.99 per ounce by
01:54 p.m. ET (1754 GMT), after hitting $1,768.96, its highest
since October 2012. U.S. gold futures        settled up 0.9% at
$1,782 per ounce.
    "The tsunami of stimulus coming in from everywhere is not
only inflationary but also painting a weaker picture for the
economy and making gold look attractive," said Edward Meir,
analyst at ED&F Man Capital Markets.
    Gold has gained nearly 16% this year, supported by global
stimulus measures since the non-yielding metal is considered a
hedge against inflation and currency debasement.
    The dollar        was down 0.5% at 96.60 against a basket of
currencies, making gold cheaper for non-U.S. currency holders.
      
    More than 9.14 million people have been reported infected by
the coronavirus globally and 473,031 have died, a Reuters tally
showed on Tuesday.             
    Gold's gains came despite a rise in equities driven by
encouraging economic data and after U.S. President Donald Trump
tweeted that the U.S.-China trade pact was "fully intact".
                        
    "Gold's biggest enemy right now is if other markets grab
attention and capital," said Tai Wong, head of base and precious
metals derivatives trading at BMO.
    "Barring a poor close under $1,750 in the coming days, the
October 2012 high of about $1,800 should only be a matter of
time, a week, perhaps less."
    Holdings in SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, rose 0.58% to 1,166.04 tonnes
on Monday, a level last seen in April 2013.             
    Palladium        was little changed at $1,938.46 per ounce,
platinum        was up 0.8% at $828.73 per ounce and silver
       rose 0.6% to $17.93  per ounce.

 (Reporting by Diptendu Lahiri and Swati Verma in Bengaluru;
Editing by Sandra Maler, Tom Brown and Dan Grebler)
  
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