(Reuters) - 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 U.S. Federal Reserve.
Spot gold rose 0.3% to $1,732.72 per ounce by 12:57 p.m. ET (1657 GMT) and has jumped about 3% so far this week, heading for its biggest gain since the week of April 10.
U.S. gold futures were up 0.1% at $1,740.90.
“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 U.S. states partially reflects increased testing, but many of those states are also seeing rising hospitalizations.
“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 U.S. 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% to 1,135.05 tonnes on Thursday, its highest in over seven years.
Elsewhere, palladium rose 0.8% to $1,936.54 per ounce, while silver declined 1.2% to $17.49.
Platinum eased 0.4% to $808.07 an ounce and was set for its biggest weekly fall since end-March.
Reporting by Asha Sistla in Bengaluru; Editing by Steve Orlofsky