Gold up on COVID-19 spike, economic woes

LONDON: Gold was up on Friday morning in Asia as the latest COVID-19 data shows severely worsening conditions across the globe, particularly in the U.S.
Gold futures edged up 0.14% at $1,875.95 by 12:16 AM ET (4:16 AM GMT)
Investors turned away from the stock markets and toward gold on Friday morning as the coronavirus virus takes more of a grip on economic activity. As markets factor in the timescale and logistical difficulties involved in both achieving and distributing a workable vaccine, the bullish sentiment from Pfizer Inc (NYSE:PFE) and BioNTech’s (F:22UAy) Monday announcement of positive vaccine trial data is running out.
European Central Bank (ECB) President Christine Lagarde cautioned against too much optimism over vaccine progress: “While the latest news on a vaccine looks encouraging, we could still face recurring cycles of accelerating viral spread and tightening restrictions until widespread immunity is achieved,” Lagarde told the? ECB’s “Central Banks in a Shifting World” forum on Thursday. Federal Reserve Chairman Jerome Powell and Bank of England Governor Andrew Bailey also participated in the forum.
The U.S. and Europe are being particularly hard hit, with U.S. coronavirus cases reaching an all-time high of 14,231 a day according to Johns Hopkins University data. A dozen U.S. states have doubled their COVID-19 case loads in the past 14 days, with no respite from the pandemic in the foreseeable future.
Keeping prices of the yellow metal down is the continued deadlock of U.S. talks on a COVID-19 stimulus package, with Republican U.S. Congress Senate Majority Leader Mitch McConnell saying “It seems to me that snag that hung us up for months is still there.?I don’t think the current situation demands a multi-trillion-dollar package. So, I think it should be highly targeted, very similar to what I put on the floor both in October and September.”
Democrats are proposing a $2.2 trillion bill, down from $3.4 trillion, however, this is considered by Republicans as far too expensive. A substantial financial stimulus package would be expected to weaken the dollar, and in return boost gold prices.