Gold hits 1-month peak on pandemic-led economic concerns
By Sumita Layek (Reuters) - Gold prices edged higher to hit a more than one-month peak on Monday, on concerns about the global economic damage from the coronavirus outbreak and support measures from central banks worldwide.
By Sumita Layek
(Reuters) - Gold prices edged higher to hit a more than one-month peak on Monday, on concerns about the global economic damage from the coronavirus outbreak and support measures from central banks worldwide.
Spot gold was up 0.3% at $1,694.50 per ounce by 10:47 am EDT (1447 GMT), having earlier hit its highest since March 9 at $1,697.75. U.S. gold futures fell 0.6% to $1,742.90.
"There was a bit of profit taking early on, but prices should remain firm. Central banks are doing everything in their power to support the stock market and economy, which will eventually lead to inflation," said Phil Streible, chief market strategist at Blue Line Futures in Chicago.
"Yields on debt instruments are virtually zero, which increases physical demand for gold and silver as a safe-haven asset."
Inflation is regarded as gold-positive, because bullion is seen as a safe store of value when price pressures are rising.
The U.S. Federal Reserve on Thursday announced a broad, $2.3 trillion stimulus package to help weather the outbreak. The crisis has forced 16.8 million Americans to file for unemployment benefits since the week ended March 21.
European Union finance ministers agreed on Thursday on half-a-trillion euros worth of support for their coronavirus-battered economies but left open the question of how to finance recovery in the bloc, which is headed for a steep recession.
The pandemic has infected more than 1.8 million people worldwide and killed 113,849, forcing countries to extend lockdowns and central banks to announce support measures to mitigate the financial toll.
U.S. stock indexes fell at the open with investors bracing for an expected slide in quarterly earnings and signs of the long-term damage of the outbreak on Corporate America. [.N]
"COVID-19's deflationary effect has been a headwind for gold. But this trend should reverse in 2H20 as policy responses by governments and central banks gather traction," UBS analysts said in a note.
"Led by Fed easing, we now expect real U.S. interest rates to dip deeper into negative territory and perhaps even test the post-GFC (global financial crisis) lows," UBS said.
Lower interest rates also reduce the opportunity cost of holding non-yielding bullion.
Indicative of sentiment, holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.6% to 994.19 tonnes on Thursday.
Elsewhere, palladium rose 0.9% to $2,192.28 per ounce, while platinum dipped 1.2% to $739.30 and silver fell 0.8% to $15.20.
(Reporting by Sumita Layek in Bengaluru; editing by Jonathan Oatis)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.