Lending support to gold was the rising tally in coronavirus cases globally.
Published 21 hours ago on August 18, 2020 By Olumide Adesina Gold Up as U.S. hits Record Number of COVID-19 Cases, Gold stands firm above $1,800 over increasing virus fears and weaker dollar , Gold stands firm above $1,800 over increasing virus fears and weaker dollar
Gold prices were up on Tuesday morning at Asia trading session, buoyed by a weaker dollar. However, a tech-driven rally in the world’s largest economy and small hopes on global economic recovery, curbed the precious metal’s gains.
Gold futures up 0.35% to $2005.10 as at 12:55 AM ET (7:10 AM GMT) and stayed above the $2,000-mark.
The U.S dollar index was down 0.2% at an over one-week low, making gold cheaper for those holding other currencies.
Stephen Innes, the Chief Global Market Strategist at AxiCorp, in a note to Nairametrics, explained critical macros pushing the yellow metal up. He said;
“US-Sino tensions appeared more relaxed, given the US Administration’s more conciliatory tone on trade. The fresh injection of liquidity by the People’s Bank of China (PBoC) seems to support Chinese equities and may have also helped lift gold.
“Japan reported weak Q2 GDP data, which may have boosted safe-haven bullion buying. The latter underscored just how fragile the market remains to another secondary coronavirus shock.”
A weaker USD helped the rally, with the move up reinforced by lower US yields. The yield on the 10-year Treasury fell to 0.66% from 0.71% previously. Lending support to gold was the rising tally in coronavirus cases globally, notably in India.
Quick Fact: It should be noted that the precious metal typically moves in the opposite direction from global stock markets, especially the American and European stock markets. Humans are emotionally and physically drawn to gold.
It provides a significant store of value. Global Investors buy gold mainly to hedge against inflation.