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Gold prices headed higher Tuesday, looking to recoup some losses a day after renewed optimism about a vaccine for the coronavirus undermined the need for a safe haven, causing gold to retreat from the highest intraday levels since 2012.
Prices have found support from “fears of a global recession and fallout from central banks’ stimulus measures, while an uptick in risk-appetite after a positive report about a potential COVID-19 vaccine limited bullion’s advance,” analysts at ICICI Bank, wrote in a Tuesday note.
Gold prices have been mostly elevated recently, posting a climb last week, amid worries about the economic impact of the COVID-19 pandemic that has likely pushed the world into recession, underpinning the traditional haven appeal for the yellow metal that tends to rise during economic uncertainty.
Gold for June delivery on Comex GC00, +0.76% GCM20, +0.76% tacked on $7.30, or 0.4%, at $1,741.70 an ounce, following a 1.3% decline Monday, which marked the first decline in five sessions.
Meanwhile, July silver SIN20, +2.35% rose 32.2 cents, or 1.8%, at $17.79 an ounce, after climbing by more than 2% on Monday.
Although reports indicate that pharmaceutical company Moderna Inc. MRNA, -4.70% has made some early progress toward a vaccine for the virus, some gold bulls say that the outsize fiscal and monetary stimulus measures enacted by governments across the globe will support gold buying over the long term.
“For long-term gold positions, a vaccine may not be an absolute game-changer as central bank balance sheets will not miraculously evaporate, and political/trade tensions between China and the US are unlikely to de-escalate,” wrote Stephen Innes, global chief market strategist at AxiCorp, in a daily research note.
Other metals on Comex moved up Tuesday, with July copper HGM20, +0.43% at $2.417 a pound, up 0.5%. July platinum PLN20, +2.51% rose 1.9% to $885.50 an ounce and June PAM20, +3.69% added 2.9% to $2,086.40 an ounce.
Most palladium is in the catalytic converters of cars and “the Asia car market is back with vengeance,” with China car sales in April 2020 being over April 2019, R. Michael Jones, chief executive offer of Platinum Group Metals Ltd. PLG, +5.29% told MarketWatch. Earlier this month, the China Association of Automobile Manufacturers reported that Chinese carmakers shipped 2 million vehicles to dealerships and stores in April, up 0.9% from a year earlier, according to Bloomberg News.
“A family road trip rather than boarding a plane could become a trend. Personal, private, and clean are all words that we could see in car ads soon. Low gas prices add to the attraction,” Jones said.
Read:Signs of a rebound in gasoline demand hint at higher oil prices
