Gold price holds close to near 8-year peak as virus cases spike

New York (June 29) - Gold prices steadied on Monday, within striking distance of a near eight-year peak scaled last week and heading for their biggest quarterly gains in over four years, as a sharp rise in global coronavirus cases unnerved investors.

Spot gold was little changed at $1,769.54 per ounce by 949 GMT, but were only about $10 shy of its highest since Oct 2012, at $1,779.06, hit on Wednesday. U.S. gold futures rose 0.1% to $1,781.60. Cases of the coronavirus have soared in the United States as California ordered bars to be shut on Sunday and Washington state paused plans for re-opening the economy, while infection rates remain on the rise in countries such as Brazil and India.

"The catalyst (for gold to reach $1,800 an ounce) is already here. Rising cases in the U.S. and concerns about a second wave in Europe and Asia are likely to slow down any potential rebound in the economy and that's going to make gold an asset class that is very much in demand," said Michael Hewson, chief market analyst at CMC Markets UK.

He attributed the slight decline in gold to profit-taking going into the end of the month and quarter. The relentless spread of the coronavirus curbed optimism for a swift recovery the global economy, sending world shares to a two-week low. Gold is used as a safe investment during times of political and financial uncertainty.

Indicative of sentiment, SPDR Gold Trust , holdings rose 0.3% to 1,178.90 tonnes on Friday, while speculators increased their bullish positions in COMEX gold and silver contracts in the week to June 23. On the technical side, spot gold is poised to break a resistance at $1,778 per ounce and rise to $1,789, said Reuters technical analyst Wang Tao.

Palladium rose 0.9% to $1,876.75 per ounce, while platinum gained 1.9% to $805.98 per ounce and silver climbed 0.6% to $17.86 per ounce.

Reuters