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PRECIOUS-Gold gains more than 1% as focus returns to loose monetary policy

Published 2020-11-09, 11:30 p/m
© Reuters.
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* Spot gold may test resistance at $1,879/oz - technicals

* Interactive graphic tracking global spread of coronavirus: https://tmsnrt.rs/3mvcUoa (Adds comment, adds technicals, updates prices)

By Eileen Soreng

Nov 10 (Reuters) - Gold jumped more than 1% on Tuesday, following a sharp slide in the last session, as focus returned to the likelihood of more monetary stimulus to revive a global economy still reeling from the COVID-19 pandemic.

Spot gold XAU= had risen 1.4% to $1,888.51 per ounce by 0826 GMT, while U.S. gold futures GCv1 were 1.7% lower at$1,886.40.

Prices slumped as much as 5.2% on Monday after U.S. drugmaker Pfizer Inc (NYSE:PFE) PFE.N said its experimental COVID-19 vaccine was more than 90% effective based on initial trial results. remains major doubts over the timeline of the vaccine's global rollout and its true efficacy and such doubts may keep gold prices supported until there is more clarity," said FXTM market analyst Han Tan.

"Negative U.S. real yields as well as prospects of further monetary policy easing could still inject fresh tailwinds into the precious metal's sails."

While vaccine optimism boosted risk appetite, concerns emerged over its mass roll-out and uncertainties continued to loom over the impact of surging COVID-19 cases globally. tends to benefit from widespread stimulus as it is considered a hedge against inflation and currency debasement.

"If inflation expectations pick up as a result of increased economic activity from the vaccine, that should keep a lid on long U.S. real yields and be a supporting driver for gold," said Lachlan Shaw, head of commodity research at National Australia Bank.

Dallas Federal Reserve Bank President Robert Kaplan said on Monday the resurgence of COVID-19 poses risks to the economy, while Cleveland Fed President Loretta Mester said the Fed's emergency lending programs are still needed. gold is likely to test resistance at $1,879, a break above which could push it to $1,894, Reuters technical analyst Wang Tao said. XAG= gained 1.2% to $24.36 per ounce. Platinum XPT= climbed 1.3% to $877.28 and palladium XPD= rose 0.3% to $2,485.68.

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