LONDON – Gold gained on Friday as concerns about a hit to the global economic recovery, due to the spread of a new coronavirus variant identified in South Africa, drove investors to the safety of bullion.
Spot gold jumped 0.9% to $1,805.26 per ounce by 09:51 GMT. US gold futures advanced 1.2% to $1,805.20.
The variant spreading in South Africa possibly evades immune responses and has prompted Britain and the European Union to halt travel from the African nation.
“Markets fear this new variant could weigh more strongly on the economy than the Delta variant discovered a year ago and this has spurred some safe-haven demand for gold,” Quantitative Commodity Research (QCR) analyst Peter Fertig said according to Reuters.
European stocks tumbled and were set for their worst session in more than a year.
Aiding gold’s climb, the dollar index eased 0.4% from a 16-month peak scaled earlier this week, reducing bullion’s cost to buyers holding other currencies. US benchmark 10-year Treasury yields also weakened.
On a weekly basis though, the metal was heading for its worst week since Aug. 6 on increased expectations that the Fed could taper its asset purchases and raise interest rates at a faster pace.
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