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Gold rises as new coronavirus cases spur lockdown fears

By CNBC and Thai Newsroom Reporters

GOLD gained on Friday (June 19) as a rise in coronavirus cases raised concerns of a second wave of the pandemic that could compel governments to implement new lockdowns.

Spot gold was up 1.1% to $1,740.79 per ounce, while US gold futures settled 1.3% up at $1,753 per ounce.

Spot prices reached their highest level since 2012 last month at $1,764.55.

“There are continued upturns in Covid-19 throughout the South and Southwest of US with uptick in the hospitalization rate. … That has caused a little bit of concern of another shutdown, which is benefiting gold,” said Jeffrey Sica, founder of Circle Squared Alternative Investments.

More than 8.38 million people worldwide have been infected with the novel coronavirus. Earlier this week some 400 workers at an abattoir in northern Germany tested for the virus, and China on Friday reported 32 new cases of the virus.

“No matter what the long-term consequences, like inflation, there will be continued stimulus throughout the world and that will keep gold prices supported in the long term,” Sica said.

So far this year, gold prices have risen about 15%, supported by safe-haven demand in the midst of concerns of an economic slowdown and unprecedented amounts of government and central bank fiscal and monetary support, which has reduced bond yields and has also raised fears about inflation.

“Spot gold has yet to close above $1,750, and if and when that happens, we suspect renewed momentum and fresh buying from underinvested hedge funds will propel the price higher towards $1,800,” Saxo Bank analyst Ole Hansen wrote in a note.

Meanwhile in Thailand  Jitti Tangsithpakdi, chairman of the Gold Traders Association, said today (June 21) that gold price should rise in Thailand next week after having edged down last week, INN News reported.

The most important development next week is the direction of US economy with traders also watching whether the spot price of the precious metal will break through the resistance at US$1,745 per ounce because if it does it will move higher.

Jitti expects gold to trade in the range of US$1,720-1,745 an ounce next week but the price could fluctuate depending on the direction of US dollar.

At 9.14 a.m. yesterday the selling price of one baht weight 96.5% gold bar was 25,550.00 baht and buying price 25,450.00 baht. The selling price of one baht weight 96.5% ornament gold was 26,050.00 baht and the buying price 24,998.84 baht.

CAPTION:

Top: A mark of 999.9 fine sits on hallmarked one kilogramme gold bullion bars at the Valcambi SA precious metal refinery in Lugano, Switzerland, on April 24, 2018. Photo: Stefan Wermuth | Bloomberg | Getty Images and published by CNBC

Nina
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