Gold steadies above US$1,800 as virus fears, US-China tensions rise
[BENGALURU] Gold prices edged higher on Wednesday, holding firm above the psychological US$1,800 level, as worries over surging coronavirus cases and simmering US-China tensions boosted demand for the safe-haven metal.
Spot gold was up 0.1 per cent at US$1,808.61 per ounce by 2.40am GMT (10.40am SGT). US gold futures eased 0.1 per cent to US$1,811.40.
"Demand appears firm for gold on any dips to the US$1,800 regions for now with investors hedging Covid-19 risks, most especially after the renewed lockdown in California," said Jeffrey Halley, a senior market analyst at Oanda.
"Although the mood on Wall Street returned to upbeat, the record amounts of bank bad debt provisioning overnight, and comments from the Federal Reserve, are giving bullish investors pause for concern."
Coronavirus cases continue to rise in the United States, with many states temporarily halting their reopening of their economies to stem the outbreak, which has infected more than 13 million people worldwide so far.
Fed officials warned on Tuesday the US economy faces a longer recovery from the pandemic, and economic pain could still worsen as cases mount.
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Simmering tensions between Washington and Beijing also loom large, after US President Donald Trump signed an executive order ending preferential treatment for Hong Kong and also shut the door on Phase Two trade negotiations with China.
The resultant safe-haven demand helped gold maintain its positive trajectory despite a strong rally in US stocks overnight.
Reflecting increased investor interest in bullion, holdings of SPDR Gold Trust rose 0.2 per cent to 1,206.89 tonnes on Tuesday - its highest since April 2013.
Investors now await the Bank of Japan's policy decision later in the day for economic projections and any reassurances of additional stimulus measures.
Elsewhere, palladium rose 0.3 per cent to US$1,966.71 per ounce, platinum gained 0.2 per cent to US$827.82 and silver edged 0.1 per cent higher to US$19.22.
REUTERS
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