Gold rises over 1% on stimulus bets and economic woes

By Brijesh Patel (Reuters) - Gold regained some lost ground on Tuesday after a sharp fall in the previous session as concerns over global economic recovery and expectations of further fiscal and monetary stimulus offered support to the safe-haven metal.

Reuters November 11, 2020 00:06:20 IST
Gold rises over 1% on stimulus bets and economic woes

Gold rises over 1 on stimulus bets and economic woes

By Brijesh Patel

(Reuters) - Gold regained some lost ground on Tuesday after a sharp fall in the previous session as concerns over global economic recovery and expectations of further fiscal and monetary stimulus offered support to the safe-haven metal.

Spot gold rose 1.2% at $1,884.31 an ounce by 11:27 a.m. EST (1627 GMT). U.S. gold futures gained 1.6% to $1,883.50.

"Gold is trying to find equilibrium this morning, 24 hours after the Pfizer earthquake rearranged the landscape. I expect gold will continue to grind back higher, but it's going to take a bit longer," said Tai Wong, head of base and precious metals derivatives trading at BMO.

"The fundamental factors for gold remain quite friendly. Stimulus is on the cards and with a vaccine we will get reflation."

Gold lost 4.6% on Monday, its biggest daily fall since Aug. 11, after U.S. drugmaker Pfizer Inc said its COVID-19 vaccine was more than 90% effective based on initial trial results, lifting U.S. equities to record highs.

However, shares eased on Tuesday as worries about the extent of the COVID-19 pandemic's economic impact resurfaced.

"The fiscal and monetary response to the pandemic globally will remain highly accommodative. This will continue to provide gold and silver, as well as platinum, with reason to go higher," HSBC analysts said in a note.

"But the psychological relief and shift in risk sentiment may still weigh on gold and the other metals, with the exception of palladium, in the immediate term."

Gold tends to benefit from stimulus spending because it is considered a hedge against inflation risks and currency weakness.

Meanwhile, Dallas Federal Reserve Bank President Robert Kaplan said he was "cautious and concerned" about downside economic risks in the short term because of the resurgence of the coronavirus .

Silver gained 1.4% to $24.40 an ounce, platinum climbed 1.9% to $883 and palladium eased 0.2% at $2,472.

(Reporting by Brijesh Patel in Bengaluru; Editing by David Goodman and Chris Reese)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

U.S. job openings rise slightly in September
Business

U.S. job openings rise slightly in September

WASHINGTON (Reuters) - U.S. job openings increased moderately in September and layoffs appeared to abate, pointing to a gradual labor market recovery from the COVID-19 pandemic.

Central bankers seek new role in brave new world
Business

Central bankers seek new role in brave new world

By Balazs Koranyi and Francesco Canepa FRANKFURT (Reuters) - Taking a break from fighting the coronavirus crisis, the world's top central bankers will attempt to resolve the existential questions of their profession this week as they tune into the European Central Bank's annual policy symposium. Having struggled to lift anaemic inflation for years, officials including the heads of the ECB, the U.S. Federal Reserve and the Bank of England will attempt to figure out why monetary policy is not working as it used to and what new role they must play in a changed world - be it fighting inequality or climate change.

Asian stocks extend gains as vaccine hopes support global reopening
Business

Asian stocks extend gains as vaccine hopes support global reopening

By Lawrence Delevingne BOSTON (Reuters) - Asian shares rose on Wednesday as hopes for a successful coronavirus vaccine lifted expectations of a swift reopening of the global economy, which would help the region's heavily trade-dependent markets.