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© Reuters.
By Adam Claringbull
Investing.com – Gold was up on Wednesday morning in Asia, paring back losses from the previous session. U.S. COVID-19 stimulus hopes weakened the greenback and ever-rising coronavirus cases also pushed the market up.
Gold futures inched up 0.03% at $1,877 by 12:09 AM ET (4:09 AM GMT).
As the COVID-19 pandemic ramps up in the U.S., hopes of a substantial stimulus package have boosted gold prices. U.S. Federal Reserve chiefs have said that government assistance is needed to move the economy through this period. Financial stimulus programs tend to devalue the dollar and support the precious metal.
Indicative of the U.S. slowdown are the latest job openings data, with U.S. JOLTs Job Openings coming in at 6.436 million, under the forecast 6.5 million.
A number of U.S. states, including California, are imposing stronger coronavirus measures in response to the rapidly growing number of cases. The U.S. currently has a total of 10.2 million cases, one fifth of the global total, with over 110,000 new cases a day, according to Johns Hopkins University data.
Some of the shine has also worn off Pfizer’s Monday announcement of positive early results for its COVID-19 vaccine, with investors realizing that there is still a way to go before the vaccine meets all the requirements to be released publicly. Added to this are the logistical problems of distributing hundreds of millions of highly temperature sensitive doses.
Gold prices have been further boosted by the U.S. political situation. U.S. President Donald Trump is refusing to accept the results of the presidential election, with baseless claims of electoral fraud and cheating. This is throwing the expectations of a smooth transition of power into doubt and creating uncertainty in global markets, causing a push toward safe-haven assets such as gold.
Meanwhile, central bankers including European Central Bank (ECB) President Christine Lagarde, Bank of England Governor Andrew Bailey and Federal Reserve Chairman Jerome Powell, will speak at the online “Central Banks in a Shifting World” ECB forum later in the day.
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