Gold prices firm to 8-year high as coronavirus worries boost demand

Gold prices rose on Tuesday, hovering near an eight-year peak, as worries over surging coronavirus cases around the world kept bullion’s safety demand elevated, according to Reuters.

Spot gold was 0.1 percent higher at $1,784.99 per ounce by 0037 GMT, just $3.97 shy of a near eight-year high of $1,788.96, which was hit last week.

U.S. gold futures were mostly unchanged at $1,794.20.

India on Monday overtook Russia to record the world’s third-highest number of COVID-19 infections, while U.S. coronavirus deaths crossed 130,000 amid a surge in cases.

More than 11.56 million people have been reported to be infected by the novel coronavirus globally and 534,829? have died.

Japan’s household spending fell at the fastest pace on record in May as consumers stayed at home to contain the pandemic, pushing the world’s third-largest economy deeper into decline.

Gold is used as a safe investment during times of political and financial uncertainty.

Speculators increased their bullish positions in COMEX gold and silver contracts in the week to June 30, the U.S. Commodity Futures Trading Commission (CFTC) said on Monday.

The dollar index held near a two-week low, making gold less expensive for holders of other currencies.

Stemming bullion’s advance, Asian markets looked set to rise on Tuesday as investors weighed growing expectations of an economic rebound in China and a resurgent U.S. services industry.

U.S. services industry activity rebounded sharply in June, almost returning to its pre-COVID-19 pandemic levels, but a resurgence in coronavirus cases that has forced some restaurants and bars to close again threatens the emerging recovery.

Palladium dropped 1.1 percent to $1,919.08 per ounce, while platinum gained 1.1 percent to $821.76. Silver rose 0.5 percent to $18.30.