Gold firms on stimulus wave, doubts about vaccine
Gold rose on Wednesday amid extensive stimulus measures and uncertainty over a possible coronavirus vaccine, but bullion’s gains were limited as risk appetite improved on hopes of an economic recovery.
Spot gold was up 0.1% to $1,746.32 per ounce. U.S. gold futures rose 0.2% to $1,748.80.
“In the midst of lesser need for safe-haven assets like gold, the fact that gold continued to slowly rise speaks volumes about its underlying strength based on the idea of liquidity injection across the board from central banks and economies,” said David Meger, director of metals trading at High Ridge Futures.
“On a slightly offsetting note” was the gain in equities on optimism over the reopening of economies and pent-up consumer demand, while developments surrounding the Moderna vaccine tests were a “wild card” for markets, Meger added.
Stock markets climbed on hopes of recovery and further stimulus after drifting lower on media reports the results from Moderna Inc’s COVID-19 vaccine trial lacked detail.
Massive global stimulus to limit the economic damage from the coronavirus pandemic have supported gold, considered a hedge against inflation and currency debasement.
Federal Reserve Chairman Jerome Powell told lawmakers the Fed was looking at extending access to the credit facilities to additional borrowers, including states with smaller populations.