Gold near nine-year high as virus fears support safe-haven demand

Gold tends to benefit from widespread stimulus measures from central banks

  
Image used for illustrative purpose. 1 kg. gold bars are seen on a production line in Ahlatci Metal Refinery in the central Anatolian city of Corum, Turkey, May 11, 2017.

Image used for illustrative purpose. 1 kg. gold bars are seen on a production line in Ahlatci Metal Refinery in the central Anatolian city of Corum, Turkey, May 11, 2017.

REUTERS/Umit Bektas

Gold edged up on Tuesday after scaling a near nine-year high in the previous session, as demand was boosted by worries over a spike in COVID-19 cases and expectations of higher inflation from more stimulus measures to mitigate the economic blow.

FUNDAMENTALS

* Spot gold was up 0.1% at $1,818.53 per ounce by 0040 GMT, after hitting its highest since September 2011 at $1,820.06 on Monday. U.S. gold futures rose 0.1% to $1,819.

* More than 14.61 million people have been reported to be infected by the novel coronavirus globally and 606,979? have died, according to a Reuters tally. 

* Rising coronavirus cases in the United States has intensified fears over a global economic recovery, driving fund flows into safe-haven assets. 

* European Union leaders appeared to near an agreement on Monday on a 750-billion-euro stimulus plan for regional economies hard-hit by the pandemic. 

* Advisers to U.S. President Donald Trump and congressional Democrats were set to discuss the next steps in responding to the coronavirus crisis on Tuesday, with congressional Republicans saying they were working on a $1 trillion relief bill. 

* Gold tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency debasement.

* Indicative of sentiment, holdings of SPDR Gold Trust GLD rose 0.4% to 1,211.86 tonnes on Monday. 

* The dollar index fell to a more than four-month low against a basket of major currencies. 

* Meanwhile, the U.S. Commerce Department added 11 Chinese companies implicated in what it called human rights violations in connection with China's treatment of its Uighurs in Xinjiang in western China to the U.S. economic blacklist. 

* Asian shares were set to open higher after U.S. markets gained ground on positive data from trials of three potential COVID-19 vaccines. 

* Palladium fell 0.2% to $2,050.55 per ounce, while platinum rose 0.1% to $844.40 and silver gained 0.3% to $19.89.

(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu) ((Brijesh.Patel1@thomsonreuters.com; Within U.S. +1 651 848 5832, Outside U.S. +91 8067493865; Reuters Messaging: Brijesh.Patel1.thomsonreuters.com@reuters.net))

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