Gold firm near 9-year peak and set for 5th straight weekly rise amid COVID-19 fears

Gold prices surged and were set for a fifth straight weekly gain as worries over a spike in U.S. coronavirus cases kept the safe-haven metal near the $1,800-per-ounce level, although upbeat U.S. economic data limited the upside.

Spot gold was trading 0.2 percent high at $1,797.53 per ounce by 0922 GMT, having hit a high of $1,818.09 on Wednesday, its highest since September 2011 and was up nearly 1.5 percent for the week. U.S. gold futures rose 0.5 percent to $1,813.55.

On Thursday, more than 60,500 new COVID-19 infections were reported across the United States, the largest single-day increase of cases by any country since the pandemic emerged in China last year. Several Asian cities that had appeared to have restricted the spread of the disease, have witnessed a rise in cases, further heightening concerns that renewed lockdowns could hurt the economic recovery.

In addition, the United States imposed sanctions on the highest-ranking Chinese official yet over alleged human rights abuses against the Uighur Muslim minority, escalating tensions between Washington and Beijing.

Data released yesterday, showed the number of Americans filing for unemployment benefit claims dropped to a near 4-month low last week. Initial claims for state unemployment benefits declined 99,000 to a seasonally adjusted 1.314 million for the week ended July 4, the fourteenth straight weekly decline pushing claims to their lowest level since mid-March. However, a record 32.9 million people were collecting unemployment checks in the third week of June, supporting expectations the labor market would take years to recover.

The Bank of Japan slashed its economic view for all of the country’s regions for the second straight quarter, the first such downgrade since 2008, further highlighting the pandemic’s impact.

The greenback against a basket of currencies traded 0.1 percent lower at 96.71, having touched a low of 96.24 on Thursday, its lowest since June 11. The U.S. Treasury yields edged lower, with the benchmark 10-year note yield trading at 0.578 percent.

Investors now eye U.S. producer price index for cues on the strength of the U.S. economy.