Gold hits new high; equities struggle on virus fears

[NEW YORK] Gold chalked up another record peak on Tuesday, while equity markets struggled with mounting coronavirus fears amid a political fight in Washington over another fiscal package to support the battered US economy.

With fresh infection spikes in Asia and Europe - on top of the already high number of new cases in the US - and new containment measures, the global economic outlook remains clouded.

Virus uncertainty combined with China-US tensions has sent gold soaring nearly 30 per cent this year - and on Tuesday it struck another record pinnacle at US$1,981.27 per ounce in Asian trade before pulling back somewhat.

Some observers still predict US$2,000 could be broken as early as this week.

The euro pulled back from its recent nearly two-year peak ahead of Wednesday's Federal Reserve meeting, part of a jam-packed US economic calendar playing out over the next couple of days.

Investors are also looking ahead to the first estimate of second-quarter US gross domestic product and a congressional hearing with the CEOs of Amazon, Apple, Google and Facebook.

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Wall Street stocks finished decisively lower as legislators in Washington appeared far apart on another round of fiscal support for the coronavirus-battered economy.

Republican congressional leaders on Monday released details of their long-awaited spending plan to boost the economy.

However, the proposal contains many differences from the one backed by congressional Democrats.

Supplemental unemployment benefits are scheduled to expire this week, putting pressure on Washington to come up with a replacement for funds that have helped blunt the economic carnage from the shutdowns so far.

"The spread between the Democratic and Republican proposals hasn't closed any," said Art Hogan, chief market strategist at National Securities.

"The market is frustrated at how we have to watch Washington grind things out."

AFP