Gold ekes out gains as virus fears buoy appeal

Gold edged higher on Friday, helped by worries over a spike in COVID-19 cases that could muddy the global economic outlook, but gains were capped as it had to compete with the dollar to attract investors seeking safe-haven assets.

Fundamentals

Spot gold was up 0.2% at $1,783.97 per ounce by 1151 GMT and up about 0.3% on the week. U.S. gold futures were up 0.2% at $1,785.70.

“Gold is benefiting from some safe-haven inflows due to COVID-19 concerns in the market right now,” said Xiao Fu, head of commodity market strategy at Bank of China International.

“Gold’s near-term outlook looks mixed because the Federal Reserve has indicated tapering. If they continue to reiterate that view, it would weigh on gold as we could see the dollar strengthening and a rally in yields,” she added.