Gold prices grew on Monday as worries about a increase in Covid-19 infections dented optimism about a rapid economic turnaround worldwide, driving investors toward safe-haven gold.
Spot gold was up 0.2 per cent by 0506 GMT at $1,773.41 per ounce. Prices were $5.65 of a nearly eight-year high of $1,779.06, reached the week before. U.S. futures for gold fell 0.5 percent to $1,788.40 per ounce.
“Certainly the safe-haven purchase is coming through fairly strong, with the fresh coronavirus outbreak in the U.S., in particular, really driving that investor appetite right now,” ANZ analyst Daniel Hynes said.
California ordered some bars to close on Sunday, following similar moves in Texas and Florida, as cases nationwide soar to record levels each day. Washington state and the city of San Francisco have paused re-opening plans.
Relentless coronavirus spread exacerbated investor fears about a delay in global economic recovery, and weighed on risk appetite, pushing inflows into safe haven properties.
According to a solid majority of economists in Reuters surveys, the outlook for a global economic recovery over the past month has weakened or remained about the same at best.
During times of political and financial instability gold is used as a secure investment.
Sentiment indicative, SPDR Gold Trust, on Friday holdings rose 0.3 per cent to 1.178.90 tons, while speculators increased their bullish positions in COMEX gold and silver contracts in the week to June 23.
On the technical side, spot gold is poised to break a $1,778 per ounce resistance and rise to $1,789, Wang Tao, technical analyst at Reuters, said.
Palladium has increased 0.9 percent to $1,877.14 an ounce elsewhere, while platinum has risen 1.6 percent to $803.31 and silver has risen 0.8 percent to $17.89.