July 10, 2020 / 3:06 AM / a month ago

Gold poised for fifth weekly gain as virus cases surge

FILE PHOTO: An employee holds a 1kg gold bar at AGR (African Gold Refinery) in Entebbe, Uganda, October 4, 2018. REUTERS/Baz Ratner

(Reuters) - Gold prices on Friday were set to mark a fifth straight weekly gain, hovering above the key $1,800 level as a record surge in U.S. COVID-19 infections bolstered the metal’s safe-haven appeal.

Spot gold prices were little changed at $1,802.26 per ounce by 10:58 a.m. EDT (1458 GMT), and were up about 1.5% for the week, having soared to their highest since Sept. 2011 at $1,817.71 on Wednesday. U.S. gold futures rose 0.3% to $1,809.50 per ounce.

“Risk appetite receded a little bit late into the week, ultimately that’s been buoying (gold) prices, as we see this uptick in record-breaking new coronavirus cases not only domestically but in Central America and other parts of Europe as well,” said Alex Turro, senior market strategist at RJO Futures.

More than 60,500 new COVID-19 infections were reported across the United States on Thursday, according to a Reuters tally, the largest one-day increase in any country since the pandemic emerged in China last year.

Wall Street’s three main indexes struggled for direction as investors were nervous about the record rise in cases nationwide, while the dollar inched down against rival currencies.

“Gold could even set a new record high this year if another bolt of risk aversion courses through the markets, especially if the green shoots of the global economic recovery are snuffed out by another round of lockdowns across major economies,” said FXTM market analyst Han Tan in a note.

Advancing bullion’s gains, 10-year U.S. Treasury yields dropped to their lowest since late April.

The safe-haven metal has risen about 19% so far this year, prompted by massive stimulus measures by central banks and governments to cushion the economic fallout from the virus.

Palladium gained 1.0% to $1,962.46 per ounce, platinum rose 0.3% to $835.88 per ounce, and silver was up 0.1% at $18.67 per ounce.

Reporting by Nakul Iyer and Shreyansi Singh in Bengaluru; Editing by Andrea Ricci

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