As dollar show signs of weakness, gold price lifts
Gold is one of the assets closely following moves in the oil market, one analyst says
Bengaluru — Gold prices inched higher on Thursday on a weak dollar, amid improving risk sentiment on hopes that the novel coronavirus pandemic is nearing a peak.
Spot gold rose 0.1% to $1,647.94/oz by 3.12am GMT, having hit a four-week high of $1,671.40/oz on Tuesday. US gold futures were flat at $1,683.40/oz.
With the dollar showing signs of weakness, gold prices will remain supported, Stephen Innes, chief market strategist at financial services firm AxiCorp, said in a note.
Trading volumes have tapered off over the past 24 hours as risk sentiment has stabilised and started to improve, he added. Asian shares rose, tracking gains on Wall Street, and risk-sensitive currencies climbed on optimism that the pandemic may be peaking.
The dollar was little changed after slipping 0.1% against key rivals earlier in the session. It is down 0.6% so far this week.
New York Governor Andrew Cuomo said on Wednesday efforts at social distancing were working in getting the virus under control, even though the hardest-hit state in the US reported its highest number of deaths in a single day.
US President Donald Trump said he would like to reopen the economy with a “big bang” but that the death toll first needed to be heading down.
Meanwhile, the EU's disease monitoring agency said there had been no sign yet that the peak of the region's outbreak had been reached.
Stronger equities took the edge off investor appetite for gold, but did not completely eliminate it, said ANZ analyst Daniel Hynes, adding that the metal was also one of the assets closely following moves in the oil market. Crude oil futures rose on expectations that the world's largest oil producers would agree to cut production amid a coronavirus-driven collapse in demand.
Confirmed infections of the new coronavirus exceeded 1.41-million globally and the death toll crossed 83,400, according to a Reuters tally. In a bid to support economies hammered by the outbreak, governments and central banks around the world have unleashed unprecedented fiscal and monetary stimulus.
Reflecting appetite for bullion, holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, continued to rise.
Palladium rose 0.1% to $2,176.73/oz, while platinum gained 0.1% to $730.15/oz, having touched a more than three-week high on Wednesday. Silver climbed 0.1% to $15.06/oz, having touched a more than three-week high on Tuesday.