Gold price hits 1-month high amid rising global Covid-19 cases
The price of gold jumped to its highest in more than a month on Monday as a surge in coronavirus cases and concerns over global economic recovery pushed investors to the safe-haven metal, away from riskier assets.
Spot gold was up 0.8 percent to $1,755.74 per ounce by 13:20 GMT, after hitting its highest price point since May 18. US gold futures rose 1.1 percent to $1,771.40 per ounce.
Geopolitical tensions also supported the safe-haven asset amid developments in Hong Kong regarding a new national security law. The precious metal is often used as a safe store of value during times of political and financial uncertainty.
Indicative of sentiment, SPDR Gold Trust (the world’s largest gold-backed exchange-traded fund) said its holdings rose over two percent to 1,159.31 tons on Friday from Thursday’s 1,136.22 tons.
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“General risk aversion is helping the market; we are seeing pressure on growth exposed currencies and on share markets. Overall, there are concerns about increasing infection rates,” Michael McCarthy, chief strategist at CMC Markets, told Reuters. “The market is concerned about the outlook for growth and that of course is supportive for gold.”
The World Health Organization (WHO) reported a record increase in global coronavirus cases on Sunday, with the total rising by 183,020 in a 24-hour period. The WHO said that Brazil led the way with 54,771 cases, and the US next with 36,617. In Germany, the coronavirus reproduction rate has jumped, bringing with it the possibility of renewed restrictions on activity in Europe’s largest economy.
Globally, coronavirus infections have exceeded the nine-million mark, with more than 1,600 new deaths.
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