May 20, 2020 / 9:38 AM / 3 months ago

PRECIOUS-Gold rises as fears for the economy loom large

 (Updates prices)
    * Stocks rally fizzles as vaccine hopes fade
    * U.S. homebuilding dropped by the most on record in April 
    * FOMC minutes due at 1800 GMT
    * For an interactive graphic tracking the global coronavirus
spread, open in an external browser

    By Brijesh Patel
    May 20 (Reuters) - Gold prices rose on Wednesday as fears of
prolonged global economic weakness leapt to the fore, pushing
aside premature excitement about a possible coronavirus vaccine,
and prompted investors to seek safe-haven bullion.
    Spot gold        was up 0.4% at $1,750.36 per ounce by 1215
GMT. U.S. gold futures        rose 0.7% to $1,757.20 per ounce.
    "The situation worldwide is still tense as far as the
coronavirus is concerned. The economic outlook and a lower
interest rate environment and lower stock markets are helping
gold prices to go higher," Afshin Nabavi, senior vice president
at precious metals trader MKS SA, said.
    Stocks markets drifted lower after a media report said the
results from Moderna Inc's          COVID-19 vaccine trial,
which had buoyed global stocks this week, lacked detail.
    The latest batch of economic readings underscored the impact
on the global economy of the coronavirus outbreak, which has
infected almost 4.91 million people globally.             
    On Tuesday data showed, U.S. house-building dropped by the
most on record in April and permits for future construction
tumbled, intensifying fears over the deepest economic
contraction in the second quarter since the Great Depression.
    Gold is often used as a store of value during times of
political and financial uncertainty.
    In testimony before the U.S. Senate Banking Committee,
Federal Reserve Chairman Jerome Powell said the Fed was looking
at extending access to the credit facilities to additional
borrowers, including states with smaller populations.
    "What the Fed does in the next few months will be pretty
important, and certainly Powell did indicate that the rates
would remain near zero for foreseeable future," ANZ analyst
Daniel Hynes said.           
    The focus shifts to the Federal Open Market Committee's
April 28-29 policy meeting minutes at 1800 GMT.
    Among other precious metals, palladium        gained 0.7% to
$2,074.02 per ounce, silver        rose 0.3% to $17.45 and
platinum        climbed 1.5% to $845.14.

 (Reporting by Brijesh Patel in Bengaluru; editing by Louise
Heavens, Barbara Lewis, Kirsten Donovan)
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