Gold is heading for a third weekly advance, with the haven metal gaining on anxiety about the spread of Covid-19 variants and the prospect of prolonged dovish monetary policy.
Bullion is winning back investors after a bleak June, with fears that the world’s exit from the pandemic may be more fraught than anticipated. Renewed virus fears around the world are a boon for bullion because they may mean governments must extend monetary support to still-fragile economies.
Those risks were underscored this week by Federal Reserve minutes that highlighted continued uncertainties, and on Thursday by a rise in U.S. jobless claims. China’s surprise hint that it could unleash more liquidity to the economy also added to the sense that headwinds to a global recovery remain strong.
“Commodities came under pressure as policy makers around the world flagged risk to their economies from rising cases of Covid-19 variants,” Australia & New Zealand Banking Group (OTC:ANZBY) Ltd. said in a note. “Demand for safe haven assets rose following a lift in U.S. initial jobless claims.”
Gold rose 0.2% to $1,807 an ounce by 10:49 a.m. in Shanghai, for a 2.1% gain so far this month. A close here would be bullion’s highest in more than three weeks. (Bloomberg)