Gold at seven-year high, set for strongest week in six months

Gold prices rose 1% to their highest in seven years on Friday and were set for their strongest week in more than six months as demand for the safe-haven asset increased after a spike in coronavirus cases.

South Korea reported 52 new cases of the virus, taking the national total to 156, while Japan reported the first fatalities from a cruise ship that accounts for the biggest cluster of infections outside China.

Spot gold rose 0.8% to $1,632.65 per ounce by 0845 GMT, after hitting its highest since Feb. 14, 2013 at $1,635.98 earlier in the session. For the week, prices have risen 3% so far and were set to post their biggest weekly percentage gain since Aug. 9.

U.S. gold futures jumped 1% to $1,636.50.

“Main focus for gold seems to be the virus uncertainty … and its spread across the world,” said John Sharma, an economist at National Australia Bank.

“This is spreading some fear … not very encouraging in terms of growth, investment, consumer and business confidence.”

Asian shares fell as virus concerns caused funds to seek shelter in U.S. assets, lifting the dollar to three-year highs.

“Low inventories from a structural market deficit and limited scope of a supply response should keep demand strong,” ANZ analysts said in a note.

Silver was up 0.8% to $18.50 and was set to register its best week since week ended Aug. 30. Platinum edged higher by 0.1% to $978.49.

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