12.05.202010:46:00UTC+00Gold Prices Rise On Fears Over New Virus Outbreak

Gold prices rose on Tuesday as growing fears about a second wave of coronavirus infections fueled safe-haven investment demand for the precious metal.

Spot gold rose half a percent to $1705.30 an ounce, after having fallen for two straight sessions. U.S. gold futures were up 0.7 percent at $1,710.15 an ounce.

China, Germany and South Korea have reported new clusters of coronavirus cases, highlighting the potential threat of reopening economies too quickly.

Russia overtook Italy and Britain to report the world's highest tally of cases after the United States and Spain, but President Vladimir Putin announced plans to ease nationwide lockdown measures from Tuesday.

Germany's Robert Koch Institute reported that the "reproduction rate" - the number of people each person with the disease goes on to infect - had risen to 1.1, meaning that the virus is spreading exponentially.

Negative rates are "among the weaker tools in the toolkit," Atlanta Federal Reserve bank president Raphael Bostic said in webcast remarks, reiterating the broad view among Fed officials that the U.S. is unlikely to use a policy approach currently used in Europe and Japan.