Gold prices surge as U.S. coronavirus cases offset quick recovery hopes
Gold prices surged after tumbling from a near 8-year peak recorded in the last session, as a selloff in equity markets driven by a surge in coronavirus cases prompted some investors to dump riskier assets.
Spot gold was trading 0.3 percent up at $1,765.964 per ounce by 0729 GMT, having touched a high of $1,779.44 on Wednesday, its highest since October 2012. U.S. gold futures rose 0.1 percent to $1,777.05.
Asia shares declined as surging U.S. coronavirus cases, global trade tensions and an International Monetary Fund downgrade to economic projection dented confidence in a recovery.
On Wednesday, Florida, Oklahoma and South Carolina reported record increases in new cases, while seven other states record highs earlier in the week. The number of new daily U.S. virus cases rose to nearly 36,000 in the latest tally, near a record of 36,426 hit in late April.
Risk sentiment also weakened on news that Washington is considering changing tariff rates for various European products. The United States has added items valued at $3.1 billion to a list of European goods eligible to be hit with import duties, as part of the trading partners’ aircraft dispute.
The International Monetary Fund slashed its 2020 global output forecasts further as it sees the coronavirus pandemic causing wider and deeper damage to economic activity than initially expected. It now expects global output to shrink by 4.9 percent this year, compared with a 3.0 percent contraction predicted in April.
The greenback against a basket of currencies traded flat at 97.24, having touched a high of 97.74 on Monday, its highest since June 2. The U.S. Treasury yields edged down, with the benchmark 10-year note yield falling to a 1-week low of 0.664 percent, while the 2-year yield was at 0.189 percent.
Investors remain cautious ahead of U.S. jobless claims data, durable goods, personal consumption expenditures, gross domestic product, along with virus case figures.