Gold gains as dollar weakens; fears of economic damage mount amid coronavirus lockdowns across world

Spot gold was up 0.3 percent at $1,621.85 per ounce. US gold futures rose 1 percent to $1,641.80.

Reuters March 30, 2020 10:00:33 IST
Gold gains as dollar weakens; fears of economic damage mount amid coronavirus lockdowns across world

Gold prices edged up on Monday as the US dollar hovered near a two-week low touched in the previous session, while coronavirus lockdowns tightened across the world and stoked fears of economic damage, lifting demand for safe-haven bullion.

Spot gold was up 0.3 percent at $1,621.85 per ounce. US gold futures rose 1 percent to $1,641.80.

The dollar was holding close to its lowest since 17 March, touched on Friday, making gold cheaper for investors holding other currencies. Physical gold dealers struggled to meet surging safe-haven demand last week, especially in Singapore, as the outbreak choked global supply chains, while massive discounts were offered in India amidst a lockdown.

Gold gains as dollar weakens fears of economic damage mount amid coronavirus lockdowns across world

Representative image. AP

The coronavirus pandemic has already driven the global economy into recession and countries must respond with “very massive” spending to avoid a cascade of bankruptcies and emerging market debt defaults, the head of the International Monetary Fund warned on Friday.

Asian shares slid on Monday and oil prices took another tumble as fears mounted the global shutdown for the virus could last for months.

The US House of Representatives on Friday approved a $2.2 trillion aid package - the largest in history - to help cope with the virus-inflicted economic downturn, while US consumer sentiment dropped to near a 3-1/2-year low in March.

US deaths from coronavirus could reach 200,000 with millions of cases, the government’s top infectious diseases expert warned on Sunday as New York, New Orleans and other major cities pleaded for more medical supplies.

European Central Bank chief urged wrangling EU leaders to act more decisively to cushion the economic hit of the pandemic, three sources familiar with the matter said on Friday.

The number of deaths in Italy fell for the second consecutive day on Sunday but the country still looked almost certain to see an extension of stringent virus containment measures.

A growing number of imported virus cases in China risked fanning a second wave of infections when domestic transmissions had “basically been stopped”, a senior health official said on Sunday.

Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 1.17 percent to 964.66 tonnes on Friday.

Palladium rose 0.8 percent to $2,287.98 per ounce, platinum slipped 0.5 percent to $738.05, while silver eased 0.8 percent to $14.36.

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