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Gold soars to near 8 year high as fears of second virus wave grow

Written by Business World, on 24th Jun 2020. Posted in World

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Gold climbed to its highest level in nearly eight years on Wednesday, as safe-haven demand was boosted by worries over a surge in coronavirus infections and hopes of more stimulus measures to combat the economic blow.

Spot gold was up 0.1% at $1,767.93 per ounce as of 0645 GMT after touching $1,773, its highest level since October 2012, in early Asian trade.

U.S. gold futures rose 0.2% to $1,785.80. "The fears of second wave cases, particularly in the U.S., and also in Latin America, are driving concerns about sustained weakness in the economic recovery and that's certainly supporting safe-haven assets like gold," said ANZ analyst Daniel Hynes.

"Continued support that central banks are likely to provide to the market with bond purchasing programs and monetary easing will clearly keep the rates low for the foreseeable future."

Central banks worldwide have adopted aggressive stimulus measures and kept interest rates low, helping gold prices surge more than 16% this year, as the precious metal is widely seen as a hedge against inflation and currency debasement.

U.S. Treasury Secretary Steven Mnuchin said the next stimulus bill will focus on getting people back to work quickly and he would consider a further delay of the deadline to file tax returns.

Several U.S. states reported record infections and the death toll in Latin America passed 100,000 on Tuesday, a Reuters tally showed.

The European Union is prepared to bar travelers from the United States because of a surge in its cases, putting the country in the same category as Brazil and Russia, the New York Times said.

Also increasing gold's appeal, the dollar index hovered near a more than one-week low.

Elsewhere, palladium eased 0.1% to $1,921.46 per ounce, platinum dropped 0.3% to $826.54 and silver fell 0.3% to $17.89. (Reuters)

Source: www.businessworld.ie

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