Gold on track for third consecutive weekly gain
Bullion has risen more than 1% so far this week while palladium heads for worst week since early May
Gold prices were headed for their third consecutive weekly gain on worries about rising global cases of the novel coronavirus, though prices see-sawed on Friday after a firm dollar and a gain in equities countered safe-haven demand.
Spot gold was steady at $1,760.73/oz at 3.39am GMT. Bullion has risen more than 1% so far this week, with prices scaling a near eight-year high of $1,779.06/oz on Wednesday. US gold futures rose 0.2% to $1,770.90/oz.
“The amount of money pumped in by governments definitely supports gold as a safe haven with this Covid-19 situation still around,” said Brian Lan, MD at Singapore dealer GoldSilver Central, amid low interest rates globally. But gold is seeing some profit-taking after almost reaching the $1,780/oz mark due to the overall strength of the dollar and stocks, he said.
The dollar has pared a large part of this week’s losses. Asian stock markets ground higher, but are set to end the week little changed as surging Covid-19 infections offset encouraging economic data. Cases have been rising across the US, while more than 9.51-million people have been infected globally, according to a Reuters tally.
Bank of Japan governor Haruhiko Kuroda said second-round effects of the pandemic could hurt its economy “considerably”, signalling the bank’s readiness to ramp up stimulus again. Lower interest rates and stimulus measures tend to benefit gold, viewed as a hedge against inflation and currency debasement.
“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.
Holdings of the SPDR Gold Trust ETF stood at more than seven-year highs. Palladium gained 0.3% to $1,847.05/oz, but was heading for its worst week since May 1. Platinum was flat at $803.52/oz. Silver fell 0.9% to $17.71/oz.