July 7, 2020 / 3:38 AM / a month ago

PRECIOUS-Gold steadies near 8-year high as virus cases surge

    * Specs raise gold bullish positions in week ended June 30 -
CFTC
    * China rebound hopes, strong U.S. services industry lift
stocks
    * Interactive graphic tracking global spread of coronavirus:
open
tmsnrt.rs/3aIRuz7 in an external browser

 (Updates prices)
    By Brijesh Patel
    July 7 (Reuters) - Gold prices held steady near an
eight-year high on Tuesday as investors weighed a spike in
COVID-19 cases around the world against a survey showing a
rebound in U.S. services industry activity and expectations of a
revival in China's economy.
    Spot gold        was almost unchanged at $1,783.56 per ounce
by 0652 GMT, just $5.40 shy of a near eight-year high hit last
week. U.S. gold futures         edged 0.1% higher to $1,794.40.
    "The proliferation of new COVID-19 cases globally has added
to lingering nerves, with investors preferring to hedge that
risk via gold, even as they load up on equities again," said
Jeffrey Halley, a senior market analyst at OANDA.
    India on Monday overtook Russia to record the world's
third-highest number of COVID-19 cases, while U.S. coronavirus
deaths crossed 130,000.                          
    Gold also followed moves in the dollar index       , which
recouped some losses, but still held near a two-week low. A
stronger dollar makes the metal more expensive for those holding
other currencies.       
    Meanwhile, growing expectations of an economic rebound in
China and better-than-expected U.S. services sector data lifted
investor sentiment towards riskier assets.            
            
    "Gold remains at risk of a short-term correction, given
current market positioning," said IG Markets analyst Kyle Rodda.
    "Nevertheless, a break above $1,800 is on the cards, with
buyers probably waiting on the other side of that level. In the
bigger picture, fundamentals remain very constructive for gold."
    Indicative of sentiment, speculators increased their bullish
positions in COMEX gold and silver contracts in the week to June
30.        
    Elsewhere, palladium        dropped 1.2% to $1,915.88 per
ounce, while platinum        gained 0.7% to $818.84.
    "Auto sales have turned positive in China, but revival in
other countries looks uncertain. Weak sales will keep auto
catalyst demand soft this year," ANZ analysts wrote in a note.
    Silver        shed 0.3% to $18.16.

 (Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu
Sahu and Uttaresh.V)
  
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