Gold firms as new virus cases cast shadow over economic recovery hopesGold firms as new virus cases cast shadow over economic recovery hopes
FILE PHOTO: Gold bars and coins are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich

By Eileen Soreng

(Reuters) – Gold prices rose on Thursday, as fears that new coronavirus cases could impede economic recovery bolstered demand for the precious metal and weighed on riskier assets.

Spot gold was up 0.3% at $1,731.88 per ounce by 0933 GMT, having earlier hit a near one-week high of $1,736.49. U.S. gold futures rose 0.5% to $1,744.80 per ounce.

Gold, seen as a safe asset during times of economic turmoil, continues to be supported by persistent concerns over the state of the global economy, said FXTM market analyst Han Tan.

“Investors are currently dealing with competing narratives, between the risks of a second wave and the optimism surrounding the post-pandemic recovery,” Tan said.

Once markets get more clarity that should determine bullion’s path outside of the $1,660-$1,750 range, he said.

The imposition of travel curbs in Beijing to stop a new outbreak of coronavirus in the Chinese capital and surging new infections in several U.S. states have marred hopes of a swift global economic recovery, pressuring stock markets.

Investors now await a Bank of England meeting, where policymakers are expected to expand quantitative easing, and U.S. weekly jobless claims data, due later on Thursday, for further clues on the global economic outlook.

U.S. Fed Chair Jerome Powell said on Wednesday the U.S. economy is beginning to recover from the worst of the coronavirus crisis, but with some 25 million Americans displaced from work and the pandemic ongoing, it will need more help.

“Ongoing risks to the global economic recovery, especially with regards to recent spikes in virus cases in both the U.S. and China continue to underpin (gold’s) price action. However, a lack of physical demand is likely to see gold hold $1,700-$1,750 over the near term,” MKS PAMP said in a note.

Elsewhere, palladium rose 0.1% to $1,923.83 per ounce, while platinum was up 0.2% at $820.51.

Silver was 0.3% higher at $17.63.

(Reporting by Eileen Soreng in Bengaluru; Editing by Susan Fenton)