Gold Up, Europe Lockdowns and U.S. Election Uncertainty Prompt Flight to Safety

04:13' PM - Thursday, 29/10/2020

Gold was up on Thursday morning in Asia, after coming close to a one-month low during the previous session, as the second wave of COVID-19 led to the announcement of fresh lockdowns in Europe and a weak dollar.

Gold futures edged up 0.20% to $1,882.9 by 12:26 AM ET, falling below the $1,900 mark. The dollar inched down and stocks, which usually move inversely to gold, were down on Thursday.

France and Germany are the latest countries to reintroduce lockdowns, with French President Emmanuel Macron and German Chancellor Angela Merkel announcing the measures on Wednesday. Investors are now looking to the European Central Bank (ECB)’s monetary policy decision, to be handed down later in the day, for clues to further stimulus measures. ECB is not likely to unveil new measures in this decision but is likely to start preparations to act in December.

In Asia, the Bank of Japan (BOJ) kept its interest unchanged at –0.10% when it handed down its own monetary policy decision earlier in the day. BOJ’s massive stimulus program also saw no changes, and the central bank pledged to take further action should the COVID-19-induced economic turmoil threaten a return to deflation.

The uncertainty over the Nov. 3 presidential election in the U.S., now less than a week away, also saw investors turning to the safe-haven yellow metal. Meanwhile, holdings in SPDR Gold Trust fell 0.67% to 1,258.25 tonnes on Wednesday. - investingnews -

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