Gold rises slightly on U.S.-China tensions, gloomy economic outlook
London (May 19) - Gold prices inched up on Tuesday,
supported by strained Sino-U.S. relations and a dismal global
economic outlook, although positive news from an early-stage
trial for a coronavirus vaccine spurred some risk appetite and
capped the metal's gains.
FUNDAMENTALS
* Spot gold was up 0.2% at $1,735.04 per ounce by
0042 GMT. U.S. gold futures gained 0.2% to $1,737.10.
* On Monday, the metal fell back from a more than seven-year
high to settle 0.5% lower, as stocks and oil surged after
drugmaker Moderna said its experimental vaccine showed
promising results in an early-stage trial.
* Highlighting Sino-U.S. friction, stock exchange Nasdaq Inc
is set to unveil new restrictions on initial public
offerings, which will make it more difficult for some Chinese
companies to debut on it, sources said.
* U.S. lawmakers and officials are crafting proposals to
push American companies to move operations or key suppliers out
of China that include tax breaks, new rules, and carefully
structured subsidies.
* Money markets ramped up expectations that the United
Kingdom could cut interest rates below zero for the first time.
* The global economy will take much longer to recover fully
from the shock caused by the new coronavirus than initially
expected, the head of the International Monetary Fund
said.
* Gold has risen about 14% this year as central banks rolled
out a wave of rate cuts and other stimulus to limit the economic
damage from the pandemic. Lower interest rates reduce the
opportunity cost of holding non-yielding bullion.
* Epicentres of the coronavirus outbreak including New York,
Italy and Spain are gradually lifting restrictions that have
kept millions inside.
* Palladium slipped 0.9% to $1,995.76 per ounce,
platinum fell 0.5% to $814.01, and silver fell
0.5% to $17.09.
Reuters
