Gold prices firm on stimulus wave, doubts about possible vaccine

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.

Spot gold was up 0.2 per cent to $1,748.02 per ounce by 11:44 a.m. EDT (1544 GMT). US gold futures rose 0.4 per cent to $1,751.80.

"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 Moderna Inc's vaccine tests were a "wild card" for markets, Meger added.

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

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

Federal Reserve Chair Jerome Powell told lawmakers on Tuesday that the US central bank was looking at extending access to credit facilities to additional borrowers, including states with smaller populations.

The focus now shifts to the release of the minutes from the Fed's April 28-29 policy meeting at 2 p.m. EDT.

Recent dismal US data, including massive jobless claims, have underscored the economic blow from the pandemic, which has infected almost 4.91 million people globally.

Among other precious metals, palladium gained 1.2 per cent to $2,083.42 per ounce after touching a one-month peak earlier. Silver rose 0.4 per cent to $17.47 and platinum climbed 0.6 per cent to $837.72, holding above a two-month high.