Gold price buoyed by virus woes, but heads for worst week
Gold prices inched higher on Friday, as fears over the economic fallout from mounting cases of Covid-19 overshadowed hopes of a vaccine, although the metal was on track for its worst weekly performance since late-September.
Spot gold rose 0.1% to $1,877.14 per ounce by 0325 GMT. For the week so far, it is down 3.8%.
US gold futures gained 0.2% to $1,876.50.
“There has been a bit of shift in market psychology,” ED&F Man Capital Markets analyst Edward Meir said, adding that people are realising a significant roll-out of a vaccine will take time while the need for relief is immediate.
A Reuters tally showed novel coronavirus cases soared by more than 100% in 13 US states in the past two weeks, while the global tally crossed 52.45 million, underpinning the need for more stimulus.
“The fact that there isn’t a stimulus coming seems to be keeping a lid on it (gold)... If Congress actually comes up with a limited package, that would be beneficial,” Meir said.
Top Democrats in the US Congress urged renewed talks over a multitrillion-dollar coronavirus aid proposal, but a top Republican immediately rejected their approach as too expensive.
Meanwhile, the heads of Federal Reserve and the European Central Bank warned of the economic outlook remaining uncertain.
“Sentiment towards gold prices has eased significantly since they peaked in August, and prices would need a strong incremental bullish narrative to exceed the highs reached in 2020, which we struggle to find at this point,” Fitch Solutions wrote in a note.
Holdings in SPDR Gold Trust, world’s largest gold-backed exchange-traded fund, fell to 1,239.57 tonnes on Thursday, its lowest level since late-July.
The dollar index held steady but was on track for a 0.7% weekly gain.
Silver fell 0.2% to $24.18 per ounce. Platinum rose 0.3% to $882.18, while palladium was 0.9% higher at $2,351.77.