Gold Rises on Weakening Greenback
By Adam Claringbull
Investing.com – Gold was up on Monday morning in Asia as the U.S. dollar fell on global COVID-19 news. The coronavirus pandemic is strengthening, with European and U.S. case numbers of particular concern.
Gold futures rose 0.41% to $1,893.85 by 12:17 PM ET (4:17 AM GMT). The dollar was down on Monday morning.
Gold prices are on the rise after last week’s retreat. The rapid build in COVID-19 cases, along with the corresponding fall in economic activity as countries and U.S. states impose stronger public health measures, has caused a return to the safe-haven asset.
The initial positivity brought about by last week’s Pfizer Inc (NYSE:PFE) and BioNTech's (F:22UAy) vaccine news has worn off as investors digest the logistical difficulties of delivering a vaccine that requires -70C (-94F) storage and transport temperatures to be viable. Alongside that is the lack of information on just how long the immunity conferred will actually last, data that cannot be ascertained until the vaccine has been in circulation.
Global COVID-19 numbers are inexorably rising, with over 54 million cases globally, 11 million of which are in the U.S, according to data from Johns Hopkins University. U.S. daily cases have also reached a new high of 177,000, while Europe is also hard hit.
Added to this is the outcome of the U.S. elections, with a strong anticipation of a large COVID-19 fiscal stimulus and relief package from the incoming Biden presidential administration adding to the interest in gold. The dollar is expected to weaken further once the measures are in place.
"There is fear of a second wave with lockdowns and restrictions and the market has to work through (some) stimulus" for the U.S. economy, Eli Tesfaye, senior market strategist at RJO Futures told Investing.com. "So, the market at some point has to anticipate that cash and price in the potential inflation."
In Asia, India's Diwali and Dhanteras festivals saw customers snap up deals at jewelry shops throughout the world's second largest bullion consumers.
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