By Barani Krishnan
Investing.com – Gold futures settled a touch lower in Wednesday’s trade but quotes for the yellow metal were rock-steady at above $1,700 as financial markets tried to figure out the impact of new coronavirus cases and whether there would be a second wave of the pandemic.
Gold also remains supported by the Federal Reserve’s assurance of continued support for the U.S. economy until it fully recovers from Covid-19.
for August delivery settled down 90 cents at $1,735.60 per ounce on New York’s Comex. In post-settlement trade, however, Comex’s benchmark contract was up $1.30 at $1,737.80 by 3:40 PM ET (19:40 GMT).
, which tracks trades in bullion, rose $2.54, or 0.2%, to $1,729.05.
Fears of a second coronavirus wave have trended in recent days, with new Covid-19 cases in Beijing hitting 106 on Tuesday as 29 communities in the sprawling Chinese capital go back on lockdown. While the number of cases is still small, it is a worrying resurgence for a city that enjoyed almost two months without a single new infection.
In the United States, nine states — Alabama, Arizona, Florida, Nevada, North Carolina, Oklahoma, Oregon, South Carolina and Texas — reported either new single-day highs or set a record for seven-day new coronavirus case averages.
At least 115,000 people in the United States have died of the coronavirus, and more than 2 million cases have been reported since January.
U.S. Vice President Mike Pence, however, said in a Wall Street Journal op-ed that fears of a second wave of infections were “overblown,” dipping into his boss Donald Trump’s playbook that “the media has tried to scare the American people.”
TD Securities said in its view, gold was coiling ahead of breaking out into the $1,800 territory — a historical pattern observed several times over the course of the year.
“The key question for gold bugs is whether we are on the cusp of a regime shift in inflation. Of course, following the last decade, fears of inflation have been ridiculed as technology and demographics in particular have provided strong structural headwinds,” the Canadian brokerage said in a note.
“But, the combination of world-war era fiscal and central bank stimulus, along with a change in the central bank template including a move to symmetric inflation target, and unwinding globalization could lead to a world where inflation is once again very relevant over the coming years.”
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by : Investing.com