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PRECIOUS-Gold steadies as virus fears offset equity rally

Published 07/06/2020, 06:08 PM
Updated 07/06/2020, 08:10 PM
© Reuters.
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* Global shares climb to a four-week peak
* U.S. services sector data due at 1345 GMT
* Interactive graphic tracking global spread of coronavirus:
open
https://tmsnrt.rs/3aIRuz7 in an external browser

(Updates prices)
By Nakul Iyer
July 6 (Reuters) - Gold held steady on Monday as lingering
fears of a surge in coronavirus cases countered pressure from
stronger equities and the market awaited U.S. services sector
data expected later in the day.
Spot gold XAU= was up 0.1% at $1,776.76 per ounce by 1143
GMT. U.S. gold futures GCcv1 fell 0.2% to $1,786.40 per ounce.
In the first four days of July, 15 U.S. states have reported
record increases in new cases of COVID-19, causing some to halt
plans to ease lockdowns. Cases continued to soar in countries
including India, Australia and Mexico. "Some (riskier) asset classes are showing optimism over the
revival of the U.S economy, but with U.S.-China relations and
the shape of the recovery, sentiment for gold will be positive,"
said Jigar Trivedi, commodities analyst at Mumbai broker Anand
Rathi Shares.
Most bullish factors for gold have already been discounted
but a worsening of U.S.-China trade relations may provide some
buying momentum, he added.
Global shares hit a four-week high as Chinese activity
rebounded, while investors awaited U.S. services sector activity
data for June due later. MKTS/GLOB
Economists polled by Reuters expect the Institute for Supply
Management's (ISM) non-manufacturing data to rise to 50 in June
from 45.4, signalling a revival in economic activity.
But global stimulus measures to cushion economies from the
fallout of coronavirus-induced lockdowns and lower real yields
have lifted non-interest bearing gold 17% so far this year.
"With an increasing number of U.S. states imposing lockdowns
again, it should result in the Federal Reserve's balance sheet
continuing to grow and interest rates kept low," Phillip Futures
said in a note.
That in turn would provide underlying support for gold, it
said.
On a technical level, spot gold is biased to break
resistance at $1,778 per ounce, said Reuters technical analyst
Wang Tao. TECH/C

Palladium XPD= fell 1.1% to $1,901.85 per ounce, while
platinum XPT= rose 1.6% to $812.49 per ounce. Silver XAG=
gained 0.9% to $18.20 per ounce.

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