May 20, 2020 / 3:53 AM / 11 days ago

Gold firms on stimulus wave, doubts about vaccine

(Reuters) - Gold rose on Wednesday amid extensive stimulus measures and uncertainty over a possible coronavirus vaccine, but bullion’s gains were limited as risk appetite improved on hopes of an economic recovery.

FILE PHOTO: Gold bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, August 14, 2019. REUTERS/Michael Dalder/File photo

Spot gold was up 0.1% to $1,746.32 per ounce by 10:27 a.m. ET. U.S. gold futures rose 0.2% to $1,748.80.

“In the midst of lesser need for safe-haven assets like gold, the fact that gold continued to slowly rise speaks volumes about its underlying strength based on the idea of liquidity injection across the board from central banks and economies,” said David Meger, director of metals trading at High Ridge Futures.

“On a slightly offsetting note” was the gain in equities on optimism over the reopening of economies and pent-up consumer demand, while developments surrounding the Moderna vaccine tests were a “wild card” for markets, Meger added.

Stock markets climbed on hopes of recovery and further stimulus after drifting lower on media reports the results from Moderna Inc’s MRNA.O COVID-19 vaccine trial lacked detail.

Massive global stimulus to limit the economic damage from the coronavirus pandemic have supported gold, considered a hedge against inflation and currency debasement.

Federal Reserve Chairman Jerome Powell told lawmakers the Fed was looking at extending access to the credit facilities to additional borrowers, including states with smaller populations.

The focus now shifts to the Federal Open Market Committee’s April 28-29 policy meeting minutes due at 1800 GMT.

FEDWATCH

The latest dismal data from the U.S., including record jobless claims, underscored the economic blow from the pandemic, which has infected almost 4.91 million people globally.

Among other precious metals, palladium gained 1.9% to $2,097.26 per ounce, after touching a one-month peak earlier, silver rose 0.3% to $17.45 and platinum climbed 1.7% to $846.86, holding over a two-month high.

Reporting by Asha Sistla in Bengaluru; Editing by Bernadette Baum

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