Gold holds above $1,800 level as virus casts long shadow

Gold holds above $1,800 level as virus casts long shadow

Gold steadied above the key $1,800/oz level on Thursday, as worries over mounting COVID-19 cases offset hopes of a swift global economic recovery.

Spot gold was little changed at $1,812.35 per ounce by 0729 GMT, after rising to its highest since September 2011 at $1,817.71 on Wednesday. U.S. gold futures inched up 0.1% to $1,822.10.

Traders are seen a little exhausted after the metal cleared the $1,800 level, “but no one seems eager to abandon this trade yet”, said Edward Moya, senior market analyst at broker OANDA.

“Gold is looking very bullish both in the short- and long-term... It has enough catalysts to take it to record territory before the end of the year.”

Global coronavirus cases exceeded 12 million on Wednesday, with over half a million dead.

Keeping alive worries over the pandemic’s economic fallout, U.S. Federal Reserve officials on Wednesday suggested the recovery in the world’s largest economy may be stalling.

Meanwhile, Britain’s finance minister promised an additional $38 billion to head off an unemployment crisis.

Stimulus tends to boost gold, which is considered a hedge against inflation and currency debasement.

Providing further support to gold, the dollar traded near multi-week lows.

Asian equities ground higher as investors tried to look past Sino-U.S. tensions and renewed lockdowns to upcoming company earnings, hoping that global stimulus efforts will yield upbeat outlooks.

Boosting recovery bets, Japan’s core machinery orders rose 1.7% in May, versus an expected 5.4% drop.

While there have been some positive data releases, the re-emergence of the virus is leading a flight to safety, keeping gold in the $1,780-$1,820 range in the near term, said National Australia Bank economist John Sharma.

Among other metals, palladium climbed 1.4% to $1,942.35 per ounce, and silver gained 0.2% to $18.81, while platinum was flat at $843.89.