Gold Edges Higher as Coronavirus Worries Eclipse Vaccine Optimism

Business Standard Gold edges higher as coronavirus worries eclipse vaccine optimism

Gold prices edged higher, after dropping over 1% in the previous session, as concerns over the economic fallout from surging Covid-19 cases outweighed positive vaccine news

By Eileen Soreng (Reuters) - Gold prices edged higher on Thursday, after dropping over 1% in the previous session, as concerns over the economic fallout from surging COVID-19 cases outweighed positive vaccine news.

Spot gold rose 0.3% to $1,869.51 per ounce by 0339 GMT. U.S. gold futures were 0.4% higher at $1,869.30.

"Gold traders are trying to strike a balance between a positive vaccine news versus a rising number of coronavirus cases around the globe," said Margaret Yang, a strategist with DailyFx, which covers currency, commodity and index trading.

Although the vaccine may affect the medium- to long-term trend of gold prices, monetary and fiscal stimulus are needed in the near-term to shelter the global economy, Yang said.

European Central Bank President Christine Lagarde signalled further support for the economy on Wednesday as the pandemic intensified in Europe, with cases expected to spike in winter.

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

Risk appetite has been boosted by hopes of a successful vaccine, but analysts say it may take a long time before one becomes publicly available.