Senior refinery technician Vincente Sandoval puts a gold ‘button’ into a furnace to be further refined to form gold doré bars at Newmont Mining’s Carlin gold mine operation near Elko, Nevada, the US. Picture: REUTERS/RICK WILKING
Senior refinery technician Vincente Sandoval puts a gold ‘button’ into a furnace to be further refined to form gold doré bars at Newmont Mining’s Carlin gold mine operation near Elko, Nevada, the US. Picture: REUTERS/RICK WILKING

Bengaluru — Gold prices edged higher on Wednesday, holding firm above the psychological $1,800 level, as the worry over surging coronavirus cases and simmering US-China tension boosted demand for the safe-haven metal.

Spot gold was up 0.1% at $1,808.61/oz by 2.40am GMT. US gold futures eased 0.1% to $1,811.40.

“Demand appears firm for gold on any dips to the $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 US, 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.

Simmering tension between Washington and Beijing also looms large, after US President Donald Trump signed an executive order ending preferential treatment for Hong Kong and also shut the door on phase 2 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% 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% to $1,966.71/oz, platinum gained 0.2% to $827.82 and silver edged 0.1% higher to $19.22.

Reuters

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