PRECIOUS METALS

New COVID outbreaks give gold a lift

A surge in new COVID-19 cases in US states such as Texas and Florida has added further uncertainty to the prospects of a potential recovery, lifting gold prices higher for the third consecutive week and providing more impetus to the yellow metal heading into Q3.

Staff reporter
Gold prices hit an eight-year high on Wednesday

Gold prices hit an eight-year high on Wednesday

Gold hit an eight-year high of US$1,779/oz on Wednesday before retracing slightly to US$1,764/oz on Friday morning.

"The landscape is becoming increasingly uneven with COVID-19 cases rising in some places and still improving or plateauing in others. This has introduced additional uncertainty to the economic recovery," said Canadian bank RBC.

The current easing of lockdowns across Europe raises the prospects of further outbreaks in countries that have already been badly hit.

While RBC did not adjust its price forecasts, it said there was now a greater chance of its "higher scenario" (of an average of US$1,770/oz for Q2) relative to its lower and base case scenarios.

In addition to COVID-related concerns, London-based broker SP Angel said the amount of money being offered in fiscal stimulus by governments was "supportive" of the gold price.

"The pandemic is now in its fourth month, and businesses around the world are still shutting down," said SP Angel.

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