Gold set for third straight weekly gain as virus cases soar

By Brijesh Patel

(Reuters) - Gold prices were headed on Friday for their third consecutive weekly gain on worries of rising coronavirus infections worldwide, although a firm dollar and a gain in equities blunted safe-haven demand.

Spot gold was down 0.1% at $1,758.95 per ounce as of 0557 GMT. The bullion has risen more than 1% so far this week, with prices scaling a near eight-year high of $1,779.06 on Wednesday. U.S. gold futures fell 0.2% to $1,767.20.

"The amount of money pumped in by governments definitely supports gold as a safe haven, with this COVID-19 situation still around," said Brian Lan, managing director at Singapore dealer GoldSilver Central, amid low interest rates globally.

But gold is seeing some profit-taking after almost reaching the $1,780 mark due to the overall strength of the dollar and stocks, Lan added.

The dollar has pared a large part of this week's losses.

Asian stock markets ground higher, but are set to end the week little changed as surging COVID-19 infections offset encouraging economic data.

Cases have been rising across the United States, while over 9.51 million people have been infected globally, according to a Reuters tally.

Bank of Japan Governor Haruhiko Kuroda said second-round effects of the pandemic could hurt its economy "considerably", signalling the bank's readiness to ramp up stimulus again.

Lower interest rates and stimulus measures tend to benefit gold, viewed as a hedge against inflation and currency debasement.

"Given the macro backdrop, sentiment in the gold market is positive, and this is illustrated in the continual increase in exchange-traded fund holdings," said ING analyst Warren Patterson.

Holdings of the SPDR Gold Trust ETF stood at more than seven-year highs.

Palladium gained 0.3% to $1,847.84 per ounce, but was heading for its worst week since May 1.

Platinum fell 0.4% to $800.41. Silver dropped 1.1% to $17.69.

 

 

(Reporting by Brijesh Patel in Bengaluru; editing by Uttaresh.V)