Gold hits new high on soaring Covid-19 cases
Rally continues as spot gold and US gold futures rise amid weaker dollar
Bengaluru — Gold smashed a record high on Friday as a safety rush fuelled by the worsening coronavirus pandemic and its mounting economic toll gathered pace and put bullion on track for its longest weekly winning streak in nearly a decade.
Spot gold was up 0.3% at $2,069.78/oz by 3.08am GMT after hitting an all-time high of $2,072.50/oz in early trade. It has added 4.7% so far this week in what would be its ninth straight weekly gain. US gold futures rose 0.6% to $2,081.60.
Silver too continued its stellar run. It rose as much as 3.1% to $29.84, adding nearly 19% so far this week in what would be its best week since 1987.
“It’s difficult to hold anything but a constructive view [on gold]," said ING analyst Warren Patterson.
“Whilst the pace of the rally may slow, there certainly does seem further upside in the near term, and for the remainder of the year.”
Surging Covid-19 cases in the US have dampened hopes for a nascent economic recovery and weighed on rival safe-haven dollar. The greenback was headed for its seventh consecutive weekly decline.
Gold is likely to hover around $2,020/oz to 2,080/oz in the near term, said National Australia Bank economist John Sharma.
“The key factor will be how this virus plays out, and whether there is any progress on vaccines,” he said.
Benchmark 10-year US Treasury yields were at five-month lows, making the non-interest bearing bullion an attractive investment, and helping it rise more than 35% so far this year.
The next focus is closely watched US employment data, due at 12.30pm GMT, which is expected to show a payroll increase of 1.58-million in July, compared with 4.8-million in the previous month.
“A below consensus number could provide another boost for gold,” Patterson said.
Elsewhere, platinum dropped 2.1% to $976.72/oz and palladium fell 0.6% to $2,208.82/oz.
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