Gold prices gained on Friday as investors bought the safe-haven metal as fears of a fresh wave of coronavirus cases added to the gloomy economic outlook from the US Federal Reserve.
Spot gold rose 0.2 per cent to $US1,730.57 per ounce by 1810 GMT and has jumped about 2.7 per cent so far this week, heading for its biggest gain since the week of April 10.
US gold futures settled down 0.1 per cent at $US1,737.30.
“Despite the tentative stock market rebound this morning, we’re seeing gold prices climb because there’s still steady safe-haven demand by institutional traders,” said Edward Moya, senior market analyst at broker OANDA.
A recent spike in COVID-19 cases in about a dozen US states partially reflects increased testing, but many of those states are also seeing rising hospitalisations.
“This is not a second wave. This is just the virus working its way throughout the country and you’re going to see that derail a lot of the reopening plans across the country, which means slower economic activity – that should support gold prices,” Moya added.
Major US stock indexes bounced back from the previous session’s rout on Thursday arising from Fed expectations of a long road to economic recovery that cast a shadow over investor bets on a quick economic rebound.
Reflecting investor appetite, holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.5 per cent to 1,135.05 tonnes on Thursday, its highest in over seven years.
Elsewhere, palladium rose 0.4 per cent to $US1,929.12 per ounce, while silver declined 1.5 per cent to $US17.43.
Platinum eased 0.4 per cent to $US808.18 an ounce and was set for its biggest weekly fall since end-March.