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Spot Gold Firm Above $1,800 Per Ounce On COVID-19 Fears

Spot Gold Firm Above $1,800 Per Ounce On COVID-19 Fears

Gold is used as a safe investment during times of political and financial uncertainty

Gold prices rose on Monday, holding ground above the key $1,800 per ounce level, as a weaker dollar and worries over surging COVID-19 cases around the globe kept the safe-haven metal underpinned. Spot gold was up 0.4 per cent at $1,805.03 per ounce by 0525 GMT (10:55 am in India). US gold futures rose 0.4 per cent to $1,808.40 per ounce.

"The COVID-19 narrative is not going away and (we) don't think the US Federal Reserve is going to change course on the rates anytime soon, which should support gold prices," said Stephen Innes, chief market strategist at financial services firm AxiCorp.

The medium-term outlook for the economic recovery still looks very uncertain and this continues to provide ample room for gold to float higher, Mr Innes added.

More than 12.83 million people have been reported to be infected by the novel coronavirus globally and 565,626​ have died, according to a tally by news agency Reuters.

Coronavirus infections in the US continued to surge over the weekend as Florida reported a record increase of more than 15,000 new cases in 24 hours on Sunday.

The dollar index fell 0.2 per cent against its rivals, making gold less expensive for holders of other currencies.

Adding to the worries over economic pain, US President Donald Trump on Friday said he was not currently thinking about negotiating a "Phase 2" trade deal with China.

Gold is used as a safe investment during times of political and financial uncertainty.

Indicative of investor sentiment, speculators increased their bullish positions in COMEX gold and silver contracts in the week to July 7, the US Commodity Futures Trading Commission said on Friday.

Spot gold still targets $1,831, as it has broken a resistance at $1,796 per ounce, according to Reuters technical analyst Wang Tao.

Elsewhere, palladium gained 0.8 per cent to $1,986.79 per ounce, platinum rose 2.6 per cent to $835.85, and silver climbed 1.2 per cent to $18.89.