SINGAPORE: Gold jumped more than 1% in Asian trade on Tuesday, following a sharp slide in the last session, as focus returned to the likelihood of more monetary stimulus to revive a global economy still reeling from the Covid-19 pandemic. Spot gold had risen 1.4% to $1,888.51 per ounce by 0826 GMT, while US gold futures were 1.7% lower at$1,886.40.
Prices slumped as much as 5.2% on Monday after US drugmaker Pfizer Inc said its experimental Covid-19 vaccine was more than 90% effective based on initial trial results.
"There remains major doubts over the timeline of the vaccine's global rollout and its true efficacy and such doubts may keep gold prices supported until there is more clarity," said FXTM market analyst Han Tan.
"Negative US real yields as well as prospects of further monetary policy easing could still inject fresh tailwinds into the precious metal's sails."
Gold tends to benefit from widespread stimulus as it is considered a hedge against inflation and currency debasement.
"If inflation expectations pick up as a result of increased economic activity from the vaccine, that should keep a lid on long US real yields and be a supporting driver for gold," said Lachlan Shaw, head of commodity research at National Australia Bank.
Comments
Comments are closed.