Gold prices held firm in a narrow range on Friday, supported by fears over the economic fallout from mounting COVID-19 cases, but the metal headed for its worst weekly loss since September as hopes for a vaccine boosted risk assets earlier this week.
Spot gold rose 0.2% to $1,879.11 per ounce by 0601 GMT. For the week so far, it has declined 3.7%. U.S. gold futures gained 0.2% to $1,877.10.
“There has been a bit of shift in market psychology,” ED&F Man Capital Markets analyst Edward Meir said, adding that people are realising a significant roll-out of a vaccine will take time while the need for relief is immediate.
A Reuters tally showed novel coronavirus cases soared by more than 100% in 13 U.S. states in the past two weeks, while the global tally crossed 52.45 million, underpinning the need for more stimulus.
“The fact that there isn’t a stimulus coming seems to be keeping a lid on it (gold)… If Congress actually comes up with a limited package, that would be beneficial,” Meir said.
Top Democrats in the U.S. Congress urged renewed talks over a multitrillion-dollar coronavirus aid proposal, but a top Republican immediately rejected their approach as too expensive.
Meanwhile, the heads of the U.S. Federal Reserve and the European Central Bank warned of the economic outlook remaining uncertain.
“Sentiment towards gold prices has eased significantly since they peaked in August, and prices would need a strong incremental bullish narrative to exceed the highs reached in 2020, which we struggle to find at this point,” Fitch Solutions wrote in a note.
The dollar index held steady but was on track for a 0.8% weekly gain.
Silver was steady at $24.22 per ounce. Platinum rose 0.7% to $885.60, while palladium was 0.5% higher at $2,342.45.
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