Gold steadies above $1800 on rising virus fears, U.S.-China tensions

Andrew Cummings
July 16, 2020

Gold prices in India traded lower on the Multi Commodity Exchange (MCX) Tuesday amid muted trend in global spot prices as investors opted profit booking at higher levels, analysts said.

Gold prices rose today, holding ground above the key US$1,800 (RM7,670.70) per ounce level, as a weaker U.S. dollar and worries over surging Covid-19 cases around the globe kept the safe-haven metal underpinned.

Similarly, Silver futures too fell by Rs 600 to trade at 52,448 per kg today. Gold prices traded higher on ongoing concerns over rising coronavirus cases while mounting tension between the USA and China kept risk premium high in the prices.

In New Delhi, the price of 22-carat gold rose to Rs 47,750 per 10 gram. 24-carat in the national capital was retailing at Rs 48,950. U.S. gold futures rose 0.5% to $1,811.10. There was a time in the business till noon when gold touched the highest level of 49,088 and the lowest level of 48,935.

Indicative of investor sentiment, speculators increased their bullish positions in COMEX gold and silver contracts in the week to July 7, the US Commodity Futures Trading Commission said on Friday. Globally, gold rose 0.27 percent to $ 1,808.60 an ounce in NY.

Simmering tensions between Washington and Beijing also loom large, after US President Donald Trump signed an executive order ending preferential treatment for Hong Kong and also shut the door on Phase Two trade negotiations with China.

Also, there has been an increasing use of silver in industrial processes including for solar chips, cables, renewable energy where its high demand has pushed its prices higher. The dollar index, which gauges the greenback's strength against a basket of six currencies rose 0.1% to 96.56 against its rivals, making gold more expensive for holders of other currencies. With this, the gold price of 5 August delivery (Gold Price Today) reached the level of 49,016, crossing the level of 49 thousand by noon.

The gold/silver ratio now stands at 94.35 to 1, which means the amount of silver required to buy one ounce of gold. United States gold futures were up 0.6% at $1,813.30.

On Gold's near-term outlook, Hareesh V, Head Commodity Research at Geojit Financial Services said,"Gold's haven demand continues to be supported by concerns over surging new virus cases across the globe, weak dollar and escalating political and financial uncertainties".

Other reports by iNewsToday