Gold is heading for the biggest weekly gain since 2011, burnishing its credentials as an effective haven, as fearful investors struggle to assess the impact of the expanding global health crisis.
Bullion’s up 5.8% since Monday, near seven-year highs, amid a rush away from risk. An epic collapse in bond yields is spurring gains, with concerns rising over the scale of the coronavirus outbreak and effectiveness of policy.
The precious metal is one of the standout winners from the outbreak, with Goldman Sachs Group saying the commodity “has immunity to the virus.” Separately, money manager Jeffrey Gundlach told CNBC that gold is the best thing to own now and is headed to new highs. Bullion’s jump has come as equities sank and the Federal Reserve enacted an emergency rate cut.
“There is definitely scope for gold to test $1 700, although maybe it is a bridge too far this week, unless we get a shocking non-farm payrolls,” said Jeffrey Halley, senior market analyst at Oanda, referring to the US jobs data that are due later Friday. “Coronavirus turmoil next week will likely see gold get the momentum it needs.”
Gold rose 0.4% to $1 678.10 an ounce an at 5:23 a.m., after rallying as much as 2.3% on Thursday. A break above $1 689.31 - the intraday peak set last month - would be the highest since 2013. The yield on 10-year Treasuries extended declines on Friday below 0.9% to a record.
The global advance of the coronavirus has shaken confidence across major economies, prompting central bankers to proffer stimulus measures, including lower interest rates. In addition to the Federal Reserve’s emergency cut this week, Canada and Australia also eased.
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