Gold rose on Friday as increasing coronavirus infections globally re-ignited concerns about the economic toll from the pandemic, while scepticism over the reach of a potential COVID-19 vaccine further boosted the safe-haven metal.
Spot gold rose 0.5% to $1,884.76 per ounce by 1:57 p.m. EST (1857 GMT). But bullion was still bound for its worst weekly loss since late September, down 3.4% so far, mainly hurt by initial euphoria over an effective vaccine from Pfizer earlier in the week.
U.S. gold futures settled up 0.7% at $1,886.20.
“We have got COVID-19 raging in the U.S. and the uncertainty surrounding that and the potential for some more economic damage in the coming months; all that is working in favour of gold market bulls,” Kitco Metals senior analyst Jim Wyckoff said.
Pfizer and BioNTech SE on Monday said their COVID-19 vaccine was more than 90% effective based on initial trial results.
“Everybody was excited about the vaccine, but then the grim realization sets in that it will probably not be available for general public consumption until late winter or spring and until then … we’ve got to get through some very rough waters,” Wyckoff said.
Also supporting bullion, the dollar eased.
“There is fear of a second wave with lockdowns and restrictions and the market has to work through (some) stimulus whether we’re in a lame duck situation or with a new president-elect,” said Eli Tesfaye, senior market strategist at RJO Futures.
“So, the market at some point has to anticipate that cash and price in the potential inflation.”
Gold is considered a hedge against inflation and currency debasement likely to result from large stimulus.
Silver climbed 1.5% to $24.59 an ounce, platinum rose 1% to $888.76 and palladium fell 0.1% to $2,328.98.
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