Gold hits 1-month peak amid fears of virus second wave

Gold prices rallied to its highest in more than a month as investors sought the safety of safe-haven assets after increasing coronavirus cases intensified concerns over a delay in global economic recovery.

On Sunday, the World Health Organization reported a record increase in global coronavirus cases, while Beijing and Australia’s Victoria state re-introduced measures to control the virus. The total number of global coronavirus cases are now over 8.8 million, with investors focusing on whether this may lead to fresh lockdowns.

Moreover, geopolitical tensions in Asia also supported the safe-haven metal, as details of a new national security law for Hong Kong showed Beijing will have overarching powers on its enforcement. China’s top legislative body will meet on June 28, and the Global Times reported it would likely enact the Hong Kong security law by July 1.

Meanwhile, two U.S. Federal Reserve officials sounded increasing pessimistic on the pace of any economic recovery from the virus and warned the unemployment rate could increase again if the disease is not controlled.

Spot gold was trading 0.1 percent up at $1,745.95 per ounce by 1026 GMT, having touched a high of $1,758.67 earlier, its highest since May 18. U.S. gold futures rose 0.8 percent to $1,766.90.

Equities declined amid worries that rising coronavirus cases in the U.S. could delay a quick economic rebound from the massive downturn triggered by the pandemic.

The greenback against a basket of currencies traded 0.3 percent down at 97.41, having touched a high of 97.72 on Friday, its highest since June 2. The U.S. Treasury yields edged down, with the benchmark 10-year note yield trading at 0.691 percent, while the 2-year yield was at 0.193 percent

Investors now await the U.S. consumer sentiment figures due later in the day to gauge whether encouraging signs of recovery from May can be sustained.