Gold futures were headed higher Wednesday, supported by some safehaven buying, amid developments in Europe that suggest a longer lockdown period due to a renewed spread of COVID19.

Gold for April delivery was rising 6.50, or 0.4, to trade at 1,731.70 an ounce, after shedding 0.8 and posting the lowest settlement for a mostactive contract since March 12, FactSet data show.

Germany is expected to extend its lockdown to limit the spread of coronavirus to mid April, rattling investors who fear that such a move will weigh on the regions rebound from the pandemic.

With rising Covid cases in Europe unnerving the global financial markets, gold is rising on safe haven inflows, wrote Sophie Griffiths, market analyst at Oanda, in a daily research note.

On Tuesday, gold investors showed little reaction to the first of two days of congressional testimony from Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen on the health of the U.S. economy as America wrestles with the impact of the COVID19 pandemic.

Powell and Yellen will testify in front of a Senate committee later Wednesday morning, which could provide fresh direction, wrote Griffiths.

Source Marketwatch