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Gold steady as economic worries over virus spike offset trade optimism

Top U.S. and Chinese trade officials reaffirmed their commitment to a Phase 1 trade deal, which has seen China lagging on its obligations to buy American goods, giving a boost to financial markets on Tuesday.

August 26, 2020 / 09:37 AM IST

Gold prices were mostly unchanged on Wednesday, as worries over the global economic outlook from rising COVID-19 cases offset an uptick in risk sentiment driven by signs of progress in US-China trade negotiations.

FUNDAMENTALS

Spot gold was flat at $1,927.26 per ounce by 0037 GMT.

U.S. gold futures rose 0.5% to $1,933.60.

Top U.S. and Chinese trade officials reaffirmed their commitment to a Phase 1 trade deal, which has seen China lagging on its obligations to buy American goods, giving a boost to financial markets on Tuesday.

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COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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Asian stocks were set for a choppy session on Wednesday, following a mixed Wall Street session.

More than 23.77 million people have been reported to be infected by the novel coronavirus globally and 814,072? have died, according to a Reuters tally.

Underscoring the virus impact, a survey from the Conference Board showed U.S. consumer confidence unexpectedly fell in August to hit a six-year low.

Gold is used as a safe investment during times of political and financial uncertainty.

Market participants now await a speech by U.S. Federal Reserve Chairman Jerome Powell on Thursday, when he is expected to address the U.S. central bank's view on inflation and monetary policy.

Chinese President Xi Jinping warned that the world's second-biggest economy is facing a period of 'turbulent change' and that rising external markets risk required policymakers to increasingly rely on domestic demand to spur growth.

The dollar index held steady against a basket of major currencies.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.3% to 1,248.87 tonnes on Tuesday from 1,252.38 tonnes on Monday.

Silver was steady at $26.43 per ounce, platinum rose 0.1% to $928.12, and palladium fell 0.6% to $2,151.50.
Reuters
first published: Aug 26, 2020 09:33 am

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