EDITOR NOTE: If you’re truly concerned about the price of gold, despite the fundamental tailwinds supporting it, then don’t pay too much attention to the day-to-day volatility that you get in the news. Look at the chart, and note that gold has just broken through a wide trading range. If gold were to pull back, it has a lot of cushion space before any downward price reversal would be considered a “downtrend.” To put it in another way, gold bears beware. Contrary to the position this article takes, the dollar is NOT steady and is falling hard against the Euro; European shares are also up. However, gold continues to hold its ground. In short, both the fundamental and technical picture for gold looks bright in the weeks (and possibly months or years) ahead.
Spot gold rose 0.1% to $1,762.41 per ounce by 0953 GMT, having soared to a peak since Oct. 2012 at $1,779.06 on Wednesday, putting it on course for a 1.1% gain for the week.
U.S. gold futures rose 0.2% to $1,774.70 per ounce.
"Gold is finding tailwind from concerns about a second wave of infections as some US states see the number of new cases soar," Commerzbank analysts said in a note.
"The expansion of central bank liquidity and public debt resulting from this continues to argue for a robust demand for gold as a safe haven and store of value," they added.
Coronavirus cases have been rising across the United States, while over 9.51 million people have been infected globally, according to a Reuters tally.
Gold prices have gained 16% so far this year buoyed by increased central bank and government stimulus measures globally to cushion economies from the blow of the COVID-19 pandemic.
The metal also held ground despite a steady dollar and an uptick in European shares.
Technically, gold is in a consolidation phase and could see further rallies if investors become more risk averse, ActivTrades chief analyst Carlo Alberto De Casa said in a note.
Reflecting positive sentiment, holdings of the SPDR Gold Trust ETF held near an over seven-year peak.
"Given the macro backdrop, sentiment in the gold market is positive, and this is illustrated in the continual increase in exchange-traded fund holdings," said ING analyst Warren Patterson.
Palladium rose 0.6% to $1,853.03 per ounce. platinum fell 0.9% to $796.00 per ounce and silver was down by 0.4% at $17.80 per ounce.
Originally posted on Reuters