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Gold prices climb as new coronavirus variant jolts investors

Spot gold had climbed 1.2% to $1,810.10 per ounce by 1204 GMT and U.S. gold futures jumped 1.7% to $1,813.80

Topics
Precious metals | Gold  | Silver

Reuters 

Photo: Bloomberg
Photo: Bloomberg

prices rose more than 1% on Friday, popping back above the pivotal $1,800 level as the discovery of a new coronavirus variant sent investors scurrying for safe havens.

Spot had climbed 1.2% to $1,810.10 per ounce by 1204 GMT and U.S. futures jumped 1.7% to $1,813.80.

Little is known of the new variant detected in South Africa, Botswana and Hong Kong. But it has prompted the European Union, Britain and India to announce stricter border controls, setting up European stocks for their worst session in more than a year. [.EU] [MKTS/GLOB]

The U.S. dollar index fell 0.5%, helping gold's advance by making it a cheaper bet for overseas buyers, while U.S. benchmark 10-year Treasury yields also weakened. [USD/] [US/]

"Uncertainty about the possible consequences of the new virus variant clearly reminds the that this pandemic is not over yet," said Alexander Zumpfe, a dealer at Heraeus.

"The gold price should remain supported in this environment and the topic of tapering should take a back seat for the time being," he said.

The safe-haven rush put gold on track for its best day since early November.

Despite Friday's jump, though, gold was still headed for its worst week since mid-September, down 1.8% so far, pressured by increased expectations that the U.S. Federal Reserve could hasten interest rate rises.

Reduced stimulus and rate increases translate into a higher opportunity cost for holding non-interest-bearing gold.

Elsewhere, platinum fell 0.8% to $986.97 while palladium dropped 1.4% to $1,834.18, en route to a weekly decline of 4.3% and 11.5% respectively.

Quantitative Commodity Research analyst Peter Fertig attributed palladium and platinum's declines to fears the new variant could hurt car sales as well as demand for the metals used in automobile exhaust systems.

Spot dipped 0.1% to $23.60, leaving it on track for a 4% weekly drop.

 

(Reporting by Nakul Iyer and Bharat Govind Gautam in Bengaluru; Editing by Uttaresh.V and David Clarke)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Fri, November 26 2021. 19:45 IST
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