Gold prices climb 1% on safe-haven demand, markets eye crucial meeting of top oil producers

Gold prices gained 1 percent on Thursday on safe-haven buying ahead of an extended weekend and a crucial meeting of top oil producers, with bullion also latching on to gains in wider markets amid hopes the coronavirus pandemic was close to peaking

Reuters April 09, 2020 16:48:51 IST
Gold prices climb 1% on safe-haven demand, markets eye crucial meeting of top oil producers

Gold prices gained 1 percent on Thursday on safe-haven buying ahead of an extended weekend and a crucial meeting of top oil producers, with bullion also latching on to gains in wider markets amid hopes the coronavirus pandemic was close to peaking.

Spot gold was up 0.9 percent to $1,659.70 per ounce by 0928 GMT, having hit a four-week high of $1,671.40 on Tuesday. It has risen more than 2.6 percent this week. Most markets are closed for Good Friday on 10 April.

The US gold futures rose 1.1 percent to $1,703.30.

Gold prices climb 1 on safehaven demand markets eye crucial meeting of top oil producers

Representative image. Reuters

“The virus has driven (central banks) to aggressive monetary policy stimulus and that’s driving investors into gold. Safe-haven demand has been increasing, we’re seeing a lot of inflows into exchange-traded funds (ETF),” said UBS analyst Giovanni Staunovo.

Holdings of gold by ETFs rose in March to a record high of 3,185 tonnes, worth $165 billion, the World Gold Council said on Wednesday.

European stock markets gained, while oil prices rose on expectations the Organization of Petroleum Exporting Countries and its allies would agree to cut production to shore up oil prices that have tumbled due to a coronavirus-led demand collapse.

“Whatever decision is made, there will be elevated volatility in the oil market later, which will affect gold via inflation expectations,” Staunovo said.

Further helping gold’s appeal, the dollar .DXY was down 0.1 percent, en route to a weekly dip.

Gold has, on occasion, risen in tandem with equity markets recently, with wider market selloffs also seeping into precious metals as investors covered losses elsewhere.

“The yellow metal continues to benefit from this calmer environment, even as risk appetite improves,” OANDA analyst Craig Erlam said in a note.

“The market is flooded with cash from central banks around the world which is inflating gold prices at this highly uncertain time.”

More than 1.47 million people have been reported infected by the novel coronavirus globally and 87,760 have died.

President Donald Trump said Americans might be getting to the top of the “curve” and he would like to reopen the economy with a “big bang” but that the death toll first needed to be heading down.

Investors also awaited US jobless claims data later in the day, expected to show a jump to a staggering 15 million in the last three weeks.

Elsewhere, palladium was steady at $2,173.70 per ounce, while platinum gained 1 percent to $736.75 after hitting a three-week peak in the last session.

Silver climbed 0.6 percent to $15.14.

Updated Date:

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