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Gold on course for third weekly gain as coronavirus cases spike

Gold on course for third weekly gain as coronavirus cases spike

NEW YORK: Gold prices edged up on Friday en route to a third straight weekly gain, as a spike in coronavirus cases dashed hopes of a quick economic recovery.

Spot gold rose 0.1 per cent to $1,762.41 per ounce by 0953 GMT, having soared to a peak since October 2012 at $1,779.06 on Wednesday, putting it on course for a 1.1 per cent gain for the week.

U.S. gold futures rose 0.2 per cent to $1,774.70 per ounce.

“Gold is finding tailwind from concerns about a second wave of infections as some US states see the number of new cases soar,” Commerzbank analysts said in a note.

“The expansion of central bank liquidity and public debt resulting from this continues to argue for a robust demand for gold as a safe haven and store of value,” they added.

Coronavirus cases have been rising across the United States, while over 9.51 million people have been infected globally, according to a Reuters tally.

Gold prices have gained 16 per cent so far this year buoyed by increased central bank and government stimulus measures globally to cushion economies from the blow of the Covid-19 pandemic.

The metal also held ground despite a steady dollar and an uptick in European shares.

Technically, gold is in a consolidation phase and could see further rallies if investors become more risk averse, ActivTrades chief analyst Carlo Alberto De Casa said in a note.

Reflecting positive sentiment, holdings of the SPDR Gold Trust ETF held near an over seven-year peak.

“Given the macro backdrop, sentiment in the gold market is positive, and this is illustrated in the continual increase in exchange-traded fund holdings,” said ING analyst Warren Patterson.

Palladium rose 0.6 per cent to $1,853.03 per ounce. platinum fell 0.9 per cent to $796.00 per ounce and silver was down by 0.4 per cent at $17.80 per ounce.