PRECIOUS-Gold rises on Europe virus worries, stronger dollar caps gains

PRECIOUS-Gold rises on Europe virus worries, stronger dollar caps gains
Shafaq News/ Gold prices edged higher on Thursday as surging COVID-19 cases across Europe fuelled concerns about the pace of economic recovery, although a stronger U.S. dollar curbed the metal's gains.

Spot gold was up 0.1% at $1,736.51 per ounce by 0533 GMT. U.S. gold futures were up 0.2% at $1,736.50 per ounce.

"At these levels, gold might be catching a bit of safe-haven buying now, which is a change from what we were looking at just a few days ago," said Michael McCarthy, chief market strategist at CMC Markets.

"One of the issues for gold is there seems to be two camps -for those worried about new lockdowns in Europe and ...those who have a very positive view of the economic outlook," McCarthy said, adding both these opposing scenarios are mildly supportive of gold.

Gold is also considered a hedge against inflation, which is likely spurred by widespread stimulus to boost economic growth.

U.S. Federal Reserve members indicated on Wednesday that the central bank will start to raise rates depending on economic outcomes and that it will not reduce monetary policy accommodation until it sees actual improvements.

Limiting gold's gains, the dollar index jumped to fresh four-month highs on concerns about extended economic lockdowns in Europe and potential U.S. tax hikes.

U.S. Treasury yields dipped, with the market appearing to stabilise after benchmark yields reached one-year highs last week.

"Stabilising bond yields, sanguine comments from the U.S. Fed are keeping gold in a range without much direction," said Michael Langford, director at corporate advisory AirGuide.

In other metals, palladium was down 0.1% to $2,631.91 and platinum was up 0.2% at $1,170.

Silver was up 0.2% at $25.12, having fallen to a more than two-week low of $24.93 earlier in the session.

Source: Reuters

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