Gold holds near 1-month peak on second wave fears

Gold prices on Tuesday held firm near a more than one-month peak scaled in the last session, as a rise in coronavirus infections fuelled concerns of a second wave of the pandemic.

Spot gold was up 0.1% to $1,756.70 per ounce at 1154 GMT. On Monday, bullion hit $1,762.84, its highest since May 18. U.S. gold futures were up 0.3% to $1,771.20 per ounce.

"Stimulus and fiscal spending are going to continue to go up because the virus hasn`t gone... we`re not out of the woods yet and that`s driving continuous demand for safe havens" especially with the liquidity from central banks starting to stoke inflation, Saxo Bank analyst Ole Hansen said.

Technically, he said a break above the $1,745-$1,765 range "would trigger a chase towards the $1,800 level".

Global cases of the novel coronavirus surpassed nine million on Monday.

Gold has gained nearly 16% this year, hitting a 7-1/2 year peak of $1,764.55 last month, supported by global stimulus measures since the non-yielding metal is considered a hedge against inflation and currency debasement.

Holdings in SPDR Gold Trust, the world`s largest gold-backed exchange-traded fund, rose 0.58% to 1,166.04 tonnes on Monday, a level last seen in April 2013.

While the increase in infection is positive for gold, demand from the world`s second biggest bullion consumer India is likely to remain paralysed since the country is also seeing a spike in cases, Commerzbank said.

Also helping gold, the dollar edged 0.2% lower against a basket of currencies.

Gold`s gains came despite a rise in equities driven by data showing the downturn in the euro zone economy eased this month, and after U.S. President Donald Trump tweeted the U.S.-China trade pact was "fully intact".

Elsewhere, palladium slipped 0.6% to $1,926.25 per ounce, platinum rose 0.4% to $824.97 per ounce and silver was steady at $17.82 per ounce.