Gold gained on Friday as a rise in coronavirus cases raised concerns of a second wave of the pandemic that could compel governments to implement new lockdowns.
Spot gold was up 1.1 per cent to $US1,740.79 per ounce by 1803 GMT, while US gold futures settled 1.3 per cent up at $US1,753 per ounce.
Spot prices reached their highest level since 2012 last month at $US1,764.55.
“There are continued upturns in COVID-19 throughout the South and Southwest of US with uptick in the hospitalisation rate. … That has caused a little bit of concern of another shutdown, which is benefiting gold,” said Jeffrey Sica, founder of Circle Squared Alternative Investments.
More than 8.38 million people worldwide have been infected with the novel coronavirus. Earlier this week some 400 workers at an abattoir in northern Germany tested for the virus, and China on Friday reported 32 new cases of the virus.
“No matter what the long-term consequences, like inflation, there will be continued stimulus throughout the world and that will keep gold prices supported in the long term,” Sica said.
So far this year, gold prices have risen about 15 per cent, supported by safe-haven demand in the midst of concerns of an economic slowdown and unprecedented amounts of government and central bank fiscal and monetary support, which has reduced bond yields and has also raised fears about inflation.
“Spot gold has yet to close above $US1,750, and if and when that happens, we suspect renewed momentum and fresh buying from underinvested hedge funds will propel the price higher towards $US1,800,” Saxo Bank analyst Ole Hansen wrote in a note.
Against a basket of currencies, the dollar index was up 0.2 per cent.
Palladium fell 0.6 per cent to $US1,913.17 an ounce and was on track for a second consecutive weekly decline. Platinum gained 1.2 per cent to $US813.56 per ounce and was up 0.9 per cent so far for the week.
Silver was up 0.6 per cent at $US17.62 and was on track for a second week of gains.