Gold rose overnight amid uncertainty over how economies would emerge from a deep slowdown, although optimism about a potential vaccine for the novel coronavirus capped bullion’s advance.
Spot gold rose 0.7 per cent to $US1,743.25 per ounce by 1834 GMT. US gold futures settled 0.6 per cent higher at $US1,745.60.
“Fundamentals for gold have never been better in history. Unless we have more optimism about the vaccine, we will begin to see an upward momentum to a new high,” said Jeffrey Sica, founder of Circle Squared Alternative Investments.
“Any news of a setback in re-integration of businesses into the economy will ultimately lead gold higher.”
Massive global stimulus to limit the economic damage from the coronavirus have supported gold, since it is widely viewed as a hedge against inflation and currency debasement.
Driving demand for safe havens, meanwhile, were fears of a further deterioration in China-US relations, with Nasdaq Inc set to unveil restrictions that will make it more difficult for some Chinese companies to list.
Wall Street traded mixed, having rallied in the previous session after drugmaker Moderna said its experimental COVID-19 vaccine showed promising results in a preliminary trial.
Monday’s jump in equities and oil had caused gold to retreat from a multi-year peak.
“Right now, the market is focused on the aftermath of the big rally in stocks yesterday … but the underlying demand has not gone away,” said Saxo Bank analyst Ole Hansen, adding a weaker economic outlook, central bank measures and geopolitical tensions should keep gold prices high.
Elsewhere, palladium was flat at $US2,012.54 an ounce, having hit a near one-month peak of $US2,109.20.
Platinum jumped 2 per cent to $US834.65 and silver rose 1.4 per cent to $US17.41.
The global palladium market will see its smallest deficit since at least 2012 this year, while platinum remains significantly oversupplied, an industry report said.