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Gold prices drifted sideways overnight as a surge in coronavirus cases and mounting economic tolls kept investors on edge, though the metal stepped back from last session’s more than 7-1/2-year high.

Spot gold was little changed at $US1,762.11 per ounce as of 1800 GMT, after hitting its highest level since October 2012 at $US1,779.06 on Wednesday. US gold futures settled 0.3 per cent lower at $US1,770.60.

“The market is taking into account what kind of ramifications the second wave of the virus could have on the economy,” said David Meger, director of metals trading at High Ridge Futures.

“The (gold) market seems well supported due to the second wave of coronavirus in the United States and around the world, and the economic concerns related to that is elevating safe-haven demand,” Meger added.

The weekly jobless claims report on Thursday showed millions continue to collect unemployment checks more than a month after many businesses resumed operating following virus-led lockdowns.

Other data underscored expectations that the economy would contract in the second quarter at its fastest pace since the Great Depression.

Gains in bullion, however, were cut by safe-haven flows into the greenback. The dollar index was up 0.2 per cent.

Australia and some US states reported a spike in cases as well as Latin America and India, the world’s second biggest bullion consumer.

“Falls in the gold price are still being viewed by investors as buying opportunities,” Commerzbank said in a note, adding, “We therefore regard the latest weakness in the gold price as temporary and envisage new highs in the near future.”

In other precious metals, platinum was down 0.5 per cent at $US796.28. The metal fell to its lowest since June 15 earlier in the session, having posted its biggest one-day decline since March 19 on Wednesday.

Palladium fell 1.1 per cent to $US1,844.30 per ounce and silver rose 1.2 per cent to $US17.73.