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Gold gains, markets mixed

Market futures are mixed to start the week ahead of an OPEC meeting, further comments to come from US Federal Reserve chair Jerome Powell and fears of a second wave of COVID-19 as reopenings gather pace.
Gold gains, markets mixed Gold gains, markets mixed Gold gains, markets mixed Gold gains, markets mixed Gold gains, markets mixed

The World Gold Council has pointed to gold’s increase in relevance to central bank management

Staff reporter

US stocks closed higher on Friday but the three key indices suffered their biggest weekly percentage declines since March, Reuters reported.

The global number of COVID-19 cases has risen to 7.87 million, according to Johns Hopkins University, and Beijing has reportedly shut its largest food market after dozens of people tested positive for coronavirus.

The gold price has risen to almost US$1,734 an ounce on the spot market.

The World Gold Council said on Friday its 2020 central bank gold reserves survey showed strong signs of an increase in gold's relevance for central bank reserve management.

It said the majority - 88% - had picked "negative interest rates" as relevant to their investment decisions.

This view would probably be reinforced in the post-COVID-19 era as continued monetary expansion would keep global rates low or negative for the foreseeable future, a situation that increases gold's attractiveness ("opportunity cost") relative to fixed income, the council's head of central banks relationships Shaokai Fan said.

Among the mining majors, Rio Tinto (LSE: RIO) closed up 2.25% on Friday.

Newmont (NYSE: NEM) finished 1.05% lower in New York.

Finally, metals and mining stocks enjoyed a collective 4% gain in Toronto, where Alaska-focused Trilogy Metals (TSX: TMQ) rose 11.39% on no news.