Precious gold gains on fresh pandemic resurgence fear, dour Fed projection

by   |  VIEW 1348

Precious gold gains on fresh pandemic resurgence fear, dour Fed projection

The safe-haven precious metal gold futures’ prices edged higher on Friday, as market participants seemed to be fretted over a second wave of pandemic outbreak, while a deluge of dour economic projections made by the US Fed on Wednesday’s FOMC minute had added to further glooms.

On Friday, spot gold futures’ prices climbed 0.2 per cent to $1,730.57 per ounce and registered a weekly upsurge of 2.7 per cent, marking up the precious metal’s biggest weekly percentage gain since the April 10th, however, the US gold futures’ prices ended down 0.1 per cent at $1,737.30.

Analysts see steady demand for safe-haven precious gold

In point of fact, while a number of Wall St. analysts and investment funds were betting heavily on a further upward spiral in gold futures’ prices amid growing uncertainties what appears to be re-emerged following the US Federal Reserve’s dour economic projection, a senior market analyst at brokerage firm OANDA, Edward Moya said, “Despite the tentative stock market rebound this morning, we're seeing gold prices climb because there's still steady safe-haven demand by institutional traders.

This is not a second wave. This is just the virus working its way throughout the country and you're going to see that derail a lot of the reopening plans across the country, which means slower economic activity - that should support gold prices.

” In factuality, the US Federal Reserve Chair Jerome Powell was quoted saying on Wednesday that the US economy would likely to contract by 6.5 per cent by end-2020, while Fed policymaker said that the unemployment rate would remain just shy of 10 per cent this year and the labour market weakness in the United States would persist until at least end-2021, eventually pushing the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust Holdings over 7-year highs to $1,135.05 per ton and setting up the stages of a broad-based rally for the safe-haven precious.

Apart from the safe-haven gold futures’ price, palladium gained 0.4 per cent on Friday to $1,929.12 an ounce, while platinum futures’ prices had ebbed off 0.4 per cent to $808.18 an ounce, branding its biggest weekly plunge since end-March.