Gold edged higher Monday as the number of COVID-19 cases around the world and the U.S. continued to rise and as governments prepared additional fiscal stimulus measures.
A hard-fought summit meeting of European Union leaders in Brussels was reportedly near agreement on a huge spending program, including a €750 billion rescue fund after a disagreement over the breakdown between grants and loans to debt-strapped governments. Meanwhile, U.S. lawmakers were set to begin talks over an additional coronavirus aid bill.
“The €390 billion of grants and €360 billion of loans that are now being talked about[in Europe] mean additional mountains of debt and further currency debasement,” said Daniel Briesemann, analyst at Commerzbank, in a note. “Gold should therefore profit as a store of value. Further financial aid to overcome the corona crisis is likewise being discussed in the US. This is also necessary given that the first corona emergency aid packages will soon come to an end.”
The global number of confirmed cases of the coronavirus that causes COVID-19 climbed to 14.5 million on Monday, according to data aggregated by Johns Hopkins University, and the death toll rose to 606,206. The U.S. saw 64,650 new infections on Sunday, down from the 66,026 counted on Saturday and Friday’s record of more than 76,000. The U.S. now has 3.77 million cases, or about a quarter of the global total, and 140,534 deaths.
Gold futures on Friday registered a sixth weekly gain in a row, buoyed by a combination of rising expectations for additional fiscal stimulus in Europe and the U.S. as well as uncertainty over the global economic outlook as the COVID-19 cases continue to rise.