Gold hovers near 8-year high as second coronavirus wave fears mount

A one kilo Swiss gold bar and US dollars gold coins are pictured in Paris on February 20, 2020.

JOEL SAGET| AFP via Getty Images

Gold prices climbed to its highest level in nearly eight years on Wednesday, as demand for the safe-haven asset was boosted by worries over a surge in coronavirus infections and hopes of more stimulus measures to combat the  economic blow.

Spot gold was up 0.2% at $1,769.76 per ounce as of 0234 GMT after touching $1,773, its highest level since October 2012 in early Asian trade.

U.S. gold futures rose 0.2% to $1,785.80.

“The fears of second wave cases particularly in the U.S., and also in Latin America is driving concerns about sustained  weakness in the economic recovery and that’s certainly supporting safe-haven assets like gold,” said ANZ analyst Daniel Hynes.

“Continued support that central banks are likely to provide to the market with bond purchasing programs and monetary easing will clearly keep the rates low for the foreseeable future.”

Central banks across the globe have taken aggressive stimulus measures and kept interest rates low helping gold prices surge more than 16% this year, as the precious metal is widely viewed as a hedge against inflation and currency debasement.

U.S. Treasury Secretary Steven Mnuchin said the next stimulus bill will focus on getting people back to work quickly and that he would consider a further delay of the tax filing deadline.

Several U.S. states reported record infections and the death toll in Latin America passed 100,000 on Tuesday, according to a Reuters tally.

The New York Times reported the European Union is prepared to bar U.S. travelers because of the surge of cases in the country, putting it in the same category as Brazil and Russia.

Also helping gold’s appeal, the dollar index hovered near a more than one-week low. 

Elsewhere, palladium edged up 0.1% to $1,926.06 per ounce, platinum dropped 0.4% to $825.59 and silver fell 0.4% to $17.89.

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