Gold Traders Focus On Covid-19 Scenario

Published on Oct 26, 2020 12:16

COMEX Gold futures saw a sideways trading pattern last week. The metal eased from one and half week highs but stayed largely supported and managed to hold onto $1900 per ounce mark. The Covid-19 scenario in Europe remains threatening. After around a week after curfews came into effect in greater Paris and eight other metropolitan areas, French Prime Minister Jean Castex announced new measures to curb the spread of coronavirus as cases hit fresh daily highs in the country. This is keeping buyers active in Gold at lower end even as upside remains limited on tepid Indian retail demand. World Bank stated that Gold prices rose for the eighth consecutive quarter, gaining about 12 percent in 2020Q3? reaching an all-time high of $2,067 an ounce on August 6. Gold benefited from its status as a safe haven asset during the pandemic and was buoyed by continued monetary easing by major central banks. Demand for exchange-traded funds (ETFs) rose more than three-fold year-on-year in 2020Q2, whereas jewelry demand and official sector buying fell by about one-half. Mine production disruptions, most notably in Mexico, Peru, and South Africa, and reduced gold recycling due to pandemic-induced restrictions on labor movement also supported prices. Prices are expected to average 27.5% higher in 2020 and remain broadly stable in 2021 as the global economy recovers.