Thursday, 28 May 2020
The News and Media Division of The Insight Partners
Wednesday, 20 May 2020 06:00 pm

Gold price rises as optimism around coronavirus vaccine fades

Gold prices rose on Wednesday as doubts over a potential coronavirus vaccine intensified fears over prolonged global economic weakness and prompted investors to seek safe-haven bullion.


Spot gold was up 0.3% to $1,748.73 per ounce by 0921 GMT. U.S. gold futures rose 0.5% to $1,753.40 per ounce.

“The situation worldwide is still tense as far as the coronavirus is concerned. The economic outlook and lower interest rate environment and lower stock markets are helping gold prices to go higher,” said Afshin Nabavi, senior vice president at precious metals trader MKS SA.

Stocks markets drifted lower after a media report said the trial results from Moderna Inc COVID-19 vaccine trial, which had buoyed global stocks this week, lacked detail.

The latest batch of economic readings underscored the deep impact on the global economy caused by the coronavirus outbreak, which has infected almost 4.91 million people globally.

On Tuesday data showed, U.S. homebuilding dropped by the most on record in April and permits for future construction tumbled, intensifying fears over deepest economic contraction in the second quarter since the Great Depression.

Gold is often used as a safe store of value during times of political and financial uncertainty.

In testimony before the U.S. Senate Banking Committee, Federal Reserve Chairman Jerome Powell said the Fed was looking at extending access to the credit facilities to additional borrowers, including states with smaller populations.

“What the Fed does in the next few months will be pretty important, and certainly Powell did indicate that the rates would remain near zero for foreseeable future,” ANZ analyst Daniel Hynes said.

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Tags Gold COVID-19 vaccine Stocks Economy Gold price

Neha Pandey

Aware of her elements, Neha writes the best articles across industries including electronics & semiconductors, automotive & transportation and food & beverages. Being from the finance background she has the ability to understand the dynamics of every industry and analyze the news updates to form insightful articles. Neha is an energetic person interested in music, travel, and entertainment. Since past 5 years, she written extensively on sectors like technology, finance and healthcare.

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