Gold held firm above the $1,800 per ounce level on Monday as uncertainties surrounding the impact of surging coronavirus cases continue to steer investor attention towards safe-haven assets.
On Sunday, the World Health Organization reported a record increase in global coronavirus cases, with the total rising by 230,370 in 24 hours. The biggest increases were from the United States, Brazil, India and South Africa.
“THE UNCERTAINTY RELATED TO THE CONTINUED INCREASE IN THE VIRUS COUNT IS ADDING SOME UNDERLYING SUPPORT TO THE MARKET”
Ole Hansen, SAXO BANK ANALYST
Fears of a prolonged impact on global economies carried over into the new week, which combined with escalating US-China trade tensions added further support for gold prices.
Spot gold rose 0.5% to $1,807.96 per ounce by noon EDT, close to the new eight-year high it set last week. US gold futures were also up 0.5% at $1,811.30 per ounce.
“The uncertainty related to the continued increase in the virus count is adding some underlying support to the market … There’s absolutely no reason not to hold on to long positions for at least as long as we stay above the $1,765 area,” Saxo Bank analyst Ole Hansen told Reuters.
However, the emergence of a viable vaccine to treat the virus could prompt profit-taking in gold, Hansen cautioned.
The precious metal’s recent surge also came despite equity market gains in Asia and Europe.
“Gold price is consolidating above $1,800 with bullion holding onto this significant threshold despite stocks in green,” ActivTrades chief analyst Carlo Alberto De Casa said in a note. “This confirms investors’ huge appetite for the yellow metal in this uncertain phase on markets.”
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