Gold prices climb above $1,800 as Covid-19 cases continue to surge

Global coronavirus cases passed 13 million on Monday, while deaths from the pandemic topped 500,000

The price of gold for immediate delivery has reached a record high of $1,981 a troy ounce. Bloomberg

Gold prices rose above the key $1,800 level on Monday, underpinned by surging coronavirus cases globally and concerns that they may slow down recovering economies.

Spot gold rose 0.6 per ounce to $1,808.75 per ounce by 7.02pm UAE time on Monday evening. US gold futures were up 0.4 per cent at $1,809.40 per oz.

US-China trade tensions and the record number of Covid-19 cases being reported on a daily basis are the underlying themes supporting the gold market, Kitco Metals senior analyst Jim Wyckoff said.

"Of course, there's going to be normal downside corrections, but the trend remains up."

Global coronavirus infections passed 13 million on Monday, according to a Reuters tally, marking another milestone in the spread of the disease which has killed more than half a million people in seven months.

Driving inflows into the safe-haven asset further, China announced "corresponding sanctions" against the US on Monday after Washington penalised senior Chinese officials over the treatment of minority Uighur Muslims in Xinjiang.

The dollar index dropped 0.4 per cent after a third consecutive weekly decline, while Wall Street's main indexes rose as investors cheered signs of progress in Covid-19 vaccine development.

The yellow metal has risen over 19 per cent so far this year due to massive stimulus from governments and central banks across the globe to revive coronavirus-hit economies.

Speculators increased bullish positions in Comex gold and silver contracts in the week to July 7, the US Commodity Futures Trading Commission said on Friday.

Silver climbed 3.1 per cent to $19.25 per ounce after hitting $19.31, the highest since September 5.

Silver may continue to outperform, benefitting from both the positive precious metals environment and its industrial characteristics, at a time when its supply may remain constrained, TD Securities said in a note.

Platinum was 3.7 per cent higher at $844.49 per ounce, while palladium gained 3.4 per cent to $2,036.64.