Gold inches higher on stimulus hopes, virus concerns

Gold prices edged higher on Wednesday supported by hopes of more U.S. stimulus measures as surging COVID-19 cases threaten to hamper economic recovery, although optimism over vaccine developments limited gains.

FUNDAMENTALS
Spot gold rose 0.2% to $1,879.31 per ounce by 0054 GMT.


U.S. gold futures were up 0.1% at $1,878.70.

A surge in coronavirus cases threatens to slow U.S. economic growth once more in coming months, Federal Reserve policymakers said on Tuesday, and to get through it the economy will again need government aid.

Gold tends to benefit from widespread stimulus as it is considered a hedge against inflation and currency debasement.

U.S. job openings increased less than expected in September while hiring fell, suggesting the labor market recovery was petering out even before a resurgence in new COVID-19 cases which is expected to slow momentum.

California and several states across the U.S. Midwest tightened restrictions on residents on Tuesday as the number of COVID-19 infections surged again in the United States.

Monday's potential breakthrough in the race to develop a COVID-19 vaccine has left governments scrambling to meet the logistical challenge of distributing hundreds of millions of doses once it becomes available in coming months.

President-elect Joe Biden said on Tuesday nothing would stop the transfer of power in the U.S. government, even as President Donald Trump says without evidence the election was marred by fraud and some of his Republican allies back probes.

Japanese Prime Minister Yoshihide Suga instructed his cabinet on Tuesday to compile a package of stimulus measures to revitalise an economy hit by the pandemic.

The dollar index was steady, while Asian shares extended gains on progress in coronavirus vaccine.

Silver rose 0.2% to $24.26. Platinum fell 0.1% to $881.98, while palladium gained 0.5% to $2,465.36.