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Nov 12, 2020

Commodities | Gold Price Report: Gold gains on ebbing vaccine optimism, stimulus bets


An Argor-Heraeus SA stamp sits on a 250 gram gold bar in Budapest, Hungary, on  March 10, 2016.

An Argor-Heraeus SA stamp sits on a 250 gram gold bar in Budapest, Hungary, on  March 10, 2016.

Akos Stiller | Bloomberg | Getty Images

Gold rose on Thursday as market optimism over a potential COVID-19 vaccine gave way to concerns over the logistics of its eventual roll-out, though prices were underpinned by expectations of further monetary stimulus.

Spot gold was up 0.3% at $1,871.00 per ounce, while U.S. gold futures were 0.3% higher at $1,867.

“We’re starting to see some doubts creeping in about how quickly any vaccine can be rolled out,” said Michael Hewson, chief market analyst at CMC Markets UK. “We may see further stimulus measures kick in as we head into year-end, because ultimately, the problems of rising (virus) cases, hospitalizations, and deaths are here and now. And a vaccine is not going to change that.”

Gold prices are still down about 4.1% so far this week after Monday’s encouraging late-stage coronavirus vaccine trial data from Pfizer Inc powered a surge in equities and drove a sharp retreat in safe-haven bullion.

European Central Bank President Christine Lagarde signalled further economic support on Wednesday, with cases expected to spike as winter sets in.

Gold has risen about 23% this year amid unprecedented global stimulus during the pandemic, given its status as a hedge against likely inflation and currency debasement resulting from the measures.

“The intensifying second coronavirus wave is likely to delay the economic recovery process, raising the level of uncertainty and supporting the precious metal,” said Hitesh Jain, lead analyst at Mumbai-based Yes Securities.

Investors are now awaiting weekly U.S. jobless claims data due at 1330 GMT, which could provide further insight on the health of the world’s largest economy.

Silver was up 0.2% at $24.30 an ounce. Platinum rose 0.8% to $871.58 and palladium gained 1.2% to $2,343.39.

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