Gold prices firmed above the key $US1,800 level overnight, as surging US coronavirus cases boosted hopes for more stimulus measures by the Federal Reserve to cushion the economic fallout from the pandemic.
Spot gold rose 0.6 per cent to $US1,809.74 per ounce by 1821 GMT. US gold futures settled up 0.7 per cent at $US1,814.1.
“With the uptick in coronavirus cases in the United States, there is a potential for another shutdown,” said Bob Haberkorn, senior market strategist at RJO Futures.
“Gold is benefiting and will continue to benefit from anticipated action by the US Fed and other central banks.”
Global coronavirus cases passed 13 million on Monday, according to a Reuters tally, while US cases surged over the weekend, with Florida reporting an increase of over 15,000 new cases in 24 hours, a record for any state.
Driving inflows into the safe-haven asset further, China announced “corresponding sanctions” against the United States on Monday after Washington penalized senior Chinese officials over the treatment of minority Uighur Muslims in Xinjiang.
The dollar dropped 0.3 per cent after a third consecutive weekly decline, while Wall Street’s main indexes rose as investors cheered signs of progress in COVID-19 vaccine development and an upbeat start to the earnings season.
The yellow metal has risen over 19 per cent so far this year due to massive stimulus from governments and central banks across the globe to revive coronavirus-hit economies.
Speculators increased bullish positions in COMEX gold and silver contracts in the week to July 7, data showed on Friday.
Silver climbed 3.4 per cent to $US19.31 per ounce after hitting $US19.35, the highest since September 5, 2019.
Silver may continue to outperform benefiting from both the positive precious metals environment and its industrial characteristics, at a time when its supply may remain constrained, TD Securities said in a note.
Platinum was 3.3 per cent higher at $US841.48 per ounce, while palladium gained 1.4 per cent to $US1,997.05.