Gold gains ground as investors brush off equity strength

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Gold prices rose on Thursday, finding support even as stocks rallied in the wake of aggressive monetary easing by major central banks and efforts to begin or continue reopening economies closed by the COVID-19 pandemic.

June gold
GCM20,
+0.59%

rose $9.20, or 0.5%, to $1,697.70 an ounce on Comex. Meanwhile, July silver
SIN20,
+1.19%

rose 15 cents, or 1%, to $15.165 an ounce. Gold losses of more than 1% on Wednesday, as the U.S. dollar strengthened and the reopening of some economies around the world, appeared to dent demand for the haven.

The U.S. dollar was mixed, with the ICE U.S. Dollar Index
DXY,
+0.18%
,
a gauge of the currency against a basket of six major rivals, up 0.1%. Gold often trades in an inverse relationship with stocks and the U.S. dollar.

But some analysts argued that gold was likely to see only limited downside as appetite for risky assets remains strong.

“In our view. historical correlations are rules that can be broken and we think that these days, gold can continue to win even if equities improve, as investors are acutely aware of the risk that they are taking on and will seek out hedges like gold,” said Christopher Louney, analyst at RBC Capital Markets, in a note.

Stock-index futures point to a higher start for U.S. equities on Thursday, while European markets were mostly higher.

July copper
HGN20,
+1.32%

was up 2.3% at $2.3755 a pound. July platinum
PLN20,
+0.78%

rose 0.2% to $767 an ounce, while June palladium
PAM20,
+1.04%

was up 0.9% at $1,775 an ounce.



Source : MTV