PRECIOUS-Gold inches up on coronavirus surge, U.S.-China tensions

Published 2020-07-15, 12:02 p/m
© Reuters.
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* SPDR Gold Trust holdings rise to over 7-year highs

* U.S. stocks gain on vaccine optimism, Goldman's results

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Adds comments, updates prices)

By Shreyansi Singh

July 15 (Reuters) - Gold prices edged up on Wednesday, holding above the key $1,800 level, as a surge in coronavirus cases and simmering U.S.-China tensions bolstered safe-haven demand, but a strong equities market capped the advance.

Spot gold XAU= rose 0.2% to $1,811.41 per ounce by 1:54 p.m. EDT (1754 GMT), after earlier hitting its highest level since July 9, at $1,814.40. U.S. gold futures GCv1 settled mostly unchanged at $1,813.80.

"A surge in confirmed cases, particularly across the U.S., lockdown measures being reinstated, as well as rising geopolitical tensions between the U.S. and China, have supported a flight to safety in gold," said Standard Chartered (LON:STAN) analyst Suki Cooper.

President Donald Trump on Tuesday ordered an end to Hong Kong's special status under U.S. law, which gives preferential economic treatment to the city, prompting Beijing to warn of retaliatory sanctions. rise in U.S. stocks following a strong quarterly showing by Goldman Sachs (NYSE:GS) and promising early data for a potential COVID-19 vaccine offset some of the bullish factors for gold. .N equities and vaccine optimism have capped some upside momentum in gold, supporting risk appetite, but underlying investor interest still remains strong," Cooper added.

The dollar .DXY fell 0.2% versus rivals, also keeping a floor under bullion. USD/

Bullion, which is widely viewed as a hedge against inflation and currency debasement, has risen over 19% so far this year, mainly benefiting from lower interest rates and widespread stimulus measures from major central banks.

Gold prices could touch $2,000 per ounce by year-end, helped by lower real interest rates, massive fiscal stimulus and a weak economy, said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

Reflecting appeal for gold, holdings of the SPDR Gold Trust GLD exchange-traded fund were near their highest level since April 2013. GOL/ETF

Elsewhere, palladium XPD= was up 1.0% at $1,979.74 an ounce, platinum XPT= rose 0.5% to $830.50 per ounce, and silver XAG= gained 0.7% to $19.34.

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