June 16, 2020 / 3:50 AM / a month ago

PRECIOUS-Gold gains after Fed ramps up support measures

    * Fed to buy U.S. corporate debt from Tuesday
    * Equities rally, dollar stalls after Fed's announcement
    * Platinum recovers from last session's 1-month trough 
    * Silver eases, but holds above Monday's 3-week low

 (Updates prices)
    By Brijesh Patel
    June 16 (Reuters) - Gold rose on Tuesday after the U.S.
Federal Reserve widened its program of buying corporate debt to
combat the financial toll of the pandemic as worries grow about
a second wave of coronavirus infections.
    Spot gold        was up 0.1% at $1,726.20 per ounce by 0647
GMT, after falling more than 1% on Monday. U.S. gold futures
        rose 0.3% to $1,733.
    "The Fed pushing ahead with further stimulus measures,
including these corporate bonds, indicates that this type of
monetary easing is going to continue for some time," said ANZ
analyst Daniel Hynes.
    "There are enough concerns around economic outlook to keep
investor demand for gold pretty solid."
    Improving risk sentiment could, however, curtail additional
investor appetite for gold, Hynes added.
    Gold tends to benefit from widespread stimulus measures from
central banks because it is widely viewed as a hedge against
inflation and currency debasement.
    The Fed said it will start purchasing corporate bonds on
Tuesday in the secondary market, sparking a risk-on move that
sent global stocks higher and weighed on the U.S. dollar.
                  
    The Bank of Japan said it expects to pump around 110
trillion yen ($1 trillion) into the economy via its market
operations and lending facilities.             
    Global cases of the novel coronavirus reached over 8 million
on Monday, as infections surge in Latin America and the United
States and China grapples with fresh outbreaks.             
    "Increasing infections imply economic weakness, need for
continued further economic (fiscal and monetary support), which
are all supportive of gold," said National Australia Bank
economist John Sharma.
    Palladium        climbed 2.5% to $1,954.70 per ounce and
platinum       jumped 0.8% to $818.35, having dipped to a
one-month low on Monday.
    Silver        fell 0.7% to $17.30, but held above last
session's near three-week low.

 (Reporting by Brijesh Patel in Bengaluru; Editing by Rashmi
Aich and Aditya Soni)
  
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