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PRECIOUS-Gold sets sights on $1,900/oz as safe-haven flows pick up

Published 24/07/2020, 08:38 pm
© Reuters.
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* Gold up more than 4% so far this week

* Silver slips, but set for best week in over three decades

* Dollar index near two-year low, equities retreat

* Interactive graphic tracking global spread of coronavirus:

* open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)

By Eileen Soreng

July 24 (Reuters) - Gold resumed its march toward $1,900 on Friday as souring U.S.-China relations added fuel to a rally towards a nine-year peak driven by fears over the economic hit from the coronavirus pandemic.

Silver, meanwhile, was en route to its best week since 1987.

Spot gold XAU= was 0.3% higher at $1,892.81 per ounce by 1207 GMT, having hit its highest since September 2011 at $1,897.91 on Thursday.

U.S. gold futures GCv1 rose 0.1% to $1,891.70.

"It's the indirect effects of the virus to the economy and deep doubts whether we're going to see a V-shaped recovery which is supporting gold," said independent analyst Ross Norman, adding that the "fear factor around the US-Chinese spat will add fuel to the fire but won't sustain (it)".

If the economy did not show "quality signs" of improving, gold could clear $1,922 and continue towards $2,000.

Non-yielding gold has surged 24% this year, underpinned by low interest rates and stimulus from central banks to revive their economies, which benefits bullion since it's a perceived safe-haven hedge against inflation and currency debasement. on Friday ordered the United States to shut its Chengdu consulate in retaliation for the closure of its consulate in Texas, dampening appetite for risk assets. MKTS/GLOB

Further helping gold, the dollar index .DXY held near a two-year low, and was on track for its biggest weekly decline since early June. USD/

Commerzbank (DE:CBKG) analysts said the rise in gold and silver had happened "possibly too quickly," adding in a note that this entailed "the risk of a setback, especially as gold and silver are being driven almost exclusively by extremely strong investment demand".

Silver XAG= fell 0.5% to $22.60 per ounce, but was still up over 17% for the week, bolstered by hopes for a revival in industrial activity.

Platinum XPT= rose 0.8% to $912.64 and palladium XPD= climbed 1.7% to $2,162.28.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Golden Ascent

https://tmsnrt.rs/39nkWKN Silver's resurgence

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