Gold prices firmed on Wednesday as economic uncertainties stemming from the coronavirus pandemic linger. However, bullion’s gains were limited as the dollar also received a lift from safe-haven inflows driven by worries about a delay in the development of a covid-19 vaccine.<\/p>\n
Spot gold was up 0.5% at $1,941.66 per ounce by noon EDT, shaking off initial declines. US gold futures advanced 0.4%, trading slightly above $1,950 an ounce.<\/p>\n
Meanwhile the US dollar, also seen as a safe haven asset was at a near one-month high against rivals, making gold expensive for holders of other currencies.<\/p>\n
However, gold\u2019s fundamentals are \u201cstill rock solid\u201d, according to Afshin Nabavi<\/a>, senior vice president at precious metals trader MKS SA. \u201cGiven the strength in the dollar, gold should have been down much more,\u201d he added.<\/p>\n News of the delay may be indirectly supportive for gold as it could spell a prolonged economic slowdown and further expectations of fiscal stimulus<\/p>\n<\/blockquote>\n<\/figure>\n Global trials of AstraZeneca\u2019s experimental covid-19 vaccine were paused due to an unexplained illness<\/a> in a study participant, keeping sentiment fragile in wider markets following the recent tech-driven sell-off<\/a> on Wall Street.<\/p>\n News of the delay may be indirectly supportive for gold as it could spell a prolonged economic slowdown and further expectations of fiscal stimulus, Saxo Bank analyst Ole Hansen told Reuters<\/em>.<\/p>\n Investors now await the outcome of the European Central Bank\u2019s policy meeting, which is set to take place on Thursday. <\/p>\n \u201cEuropean countries do need some kind of economic help from the central bank, which would make the euro a little weaker compared to the dollar,\u201d independent analyst Ross Norman said.<\/p>\n \u201cBut given the lingering uncertainties, that won\u2019t cause much damage to gold\u2019s shine.\u201d<\/p>\n The global pandemic has forced major central banks around the world to provide massive stimulus, propelling gold’s value by about 28% so far this year as it is widely considered a hedge against potential currency debasement and inflation.<\/p>\n Gold is also likely to receive an added boost as uncertainty over the upcoming US election reinvigorates demand for the precious metal as a haven, according to Peter Grosskopf<\/a> of Sprott Inc., who leads the Canadian-based asset managing firm and is a renowned gold bull.<\/p>\n Bullion, which reached a record high last month<\/a>, has stumbled in recent weeks, hampered by signs of stabilizing economies<\/a> and a surge in equities. However, Grosskopf believes the election may renew investor focus on inflation, government debt and the need for stimulus. <\/p>\n “Gold could get an added lift from a win by Democratic presidential candidate Joe Biden, who is seen as likely to raise taxes and increase spending,” he says.<\/p>\n\n
US election boost<\/strong><\/h3>\n