Gold Bugs Stay Firm Amid Surging COVID-19 in Asia

At the time of writing this report, the precious metal traded neat $1,785 per ounce after hitting its lowest levels in a week earlier in the Asian trading session.

Metal traders increased their buying pressures amid growing concerns about a spike in COVID-19 infections with Australia’s most populous city (Sydney) with restriction on social mobility in play after a number of cases involving the highly contagious delta strain exploded high.

In addition, Indonesia a key emerging market is fighting hard to tame the growing viral cases while a lockdown in Malaysia is set to be pushed forward, further triggering gold bugs to hold support around the $1,780 per ounce price levels for the near term.

Consequently, gold bugs are rallying over monetary and fiscal stimulus support globally in response to the world’s most destructive pandemic, thereby boosting the bullion asset’s value despite an uneven pace of recovery between regions.

Despite the upsurge in the value of the greenback across market spectrum, the risk-off market mood, in response to rising COVID-19 caseloads, supports the yellow metal’s safe-haven appeal.

Still, recent macros reveal the demand for gold is dwindling down at India the world’s top jewellery buyer.

Recent data collated from Chainalysis show Indian households accounting for over 25,000 tonnes of gold, are fast diversifying to crypto on the account that investments in digital assets as grown from about $200 million to nearly $40 billion in the past year, amid the outright hostility toward Crypto assets from India’s central bank, further buttresses the precious metal might unlikely break above its record high of $2,120 per ounce in the mid-term.

Though recent price patterns suggest gold prices are likely to move sideways in the near term except it breaks above the $1,800 or below the $1,760 price levels with volatility sinking fast again over the immediate impetus to buy the yellow metal.