Gold Futures Settle Higher On Safe-haven Demand
Gold prices moved higher on Wednesday as investors looked to pick up the safe-haven asset after a pause in late-stage clinical trials of a couple of coronavirus vaccines, and fading hopes about a U.S. fiscal stimulus.
Rising tensions between the U.S. and China too supported gold’s rise.
The dollar’s weakness contributed as well to the yellow metal’s uptick. The dollar index, which slipped to 93.25, was last seen at 93.40, down 0.16% from previous close.
Gold futures for December ended up $12.70 or about 0.7% at $1,907.30 an ounce.
Silver futures for December gained $0.266, settling at $24.395 an ounce, while Copper futures for December settled at $3.0505 per pound, gaining $0.0060.
On the Covid-19 front, a second wave of infections in Europe due to the virus is prompting new restrictions to stop its spread.
The regional government of Catalonia, Spain’s most-populous region, is weighing a complete shutdown of bars and restaurants to stem the spread of the virus.
In France, Paris, Marseille and seven other large cities have been placed under maximum alert.
The new three-tier system of Covid-19 restrictions has begun in England, raising concerns that the tighter measures will impact economic growth.
A halt in Covid-19 vaccine trials, diminishing prospects for a U.S. coronavirus stimulus package before the U.S. election and rising US-China tensions also helped boost the safe-haven demand for the precious metal.
On the stimulus front, Treasury Secretary Steven Mnuchin said getting something done on a new stimulus bill before the election “would be difficult.”
“We continue to make progress on certain issues, but on certain issues we continue to be far apart,” Mnuchin said about negotiations with House Speaker Nancy Pelosi in remarks to the Milken Institute Global Conference.
While the hit to the global economy from the Covid-19 crisis may not be as severe as initially feared, the recovery will be “long, uneven and uncertain”, the International Monetary Fund (IMF) said on Tuesday in its latest World Economic Outlook.