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PRECIOUS-Gold rises as economic uncertainty prevails, dollar softens

Published 18/09/2020, 08:02 pm
© Reuters.
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* Spot gold up 0.7% for the week

* Investors eye risks stemming from U.S. elections - analyst

* Interactive graphic tracking global spread of coronavirus: https://graphics.reuters.com/world-coronavirus-tracker-and-maps/ (Recasts, adds comments, updates prices)

By Nakul Iyer

Sept 18 (Reuters) - Gold prices gained on Friday buoyed by a weaker dollar and lingering concerns over an economic recovery from the damage inflicted by the coronavirus pandemic that were underscored by elevated weekly U.S. jobless claims data.

Spot gold XAU= climbed 0.6% to $1,953.80 per ounce by 0934 GMT and was on track for a second straight week of gains, rising 0.7% so far.

U.S. gold futures GCv1 were up 0.7% at $1,963.60 per ounce.

Gold is being propped up by the weaker dollar, but prices are likely to remain "in a lateral range between $1860 and $2000," said ActivTrades chief analyst Carlo Alberto De Casa.

"The scenario remains unchanged with the main trend still positive."

U.S. weekly jobless claims report on Thursday showed a smaller-then expected decline in new claims, weighing on the dollar and bolstering the appeal of gold as an investment alternative. USD/ path into the post-pandemic era still poses downside risks for the global economy, and if crystallized, could help bullion realize more of its upside," FXTM market analyst Han Tan said.

Low interest rates globally and widespread stimulus measures have helped gold gain over 28% so far this year, as they lower the opportunity cost of holding non-yielding bullion and bolster its appeal as a hedge against inflation risk.

Continuing the trend, the U.S. Federal Reserve on Wednesday vowed to keep interest rates near zero for a long time. Thursday, the Bank of England said it was considering negative interest rates, while the Bank of Japan signalled readiness to ramp up stimulus. the focus now on the U.S. presidential election on Nov. 3, any delay over its outcome could reignite the safe-haven play and potentially push gold to new record highs, FXTM's Tan said.

Silver XAG= rose 0.1% to $27.13 per ounce, while platinum XPT= rose 0.5% to $944.69 and palladium XPD= edged up by 0.1% to $2,337.81.

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