(Bloomberg) -- Gold steadied near $1,800 an ounce -- a level last seen at the end of 2011 -- as investors weighed the accelerating coronavirus spread in the U.S. against tentative signs of economic improvement in some regions.
Futures are heading for their best quarter in four years after confirmed Covid-19 cases exceeded 10 million worldwide, with the spread of the disease accelerating in America, Brazil and India. While massive central-bank stimulus has supported risk appetite and growth prospects, new Covid-19 clusters around the world indicate that the pandemic is far from over, aiding the outlook for havens like gold.
Citigroup Inc. raised its three-month forecast for spot prices to $1,825, maintaining its “longstanding bullish bias” for 2021.
Gold has gained about 17% this year as the health crisis prompted a sustained flight to havens amid unlimited quantitative easing led by the Federal Reserve. Investors also continue to pile into gold-backed exchange-traded funds, which boosted their holdings by 5.6 tons on Friday to a record, according to initial data compiled by Bloomberg.
Comex gold futures for August delivery rose 0.1% to settle at $1,781.20 an ounce at 1:31 p.m. in New York. Futures -- which touched a record $1,923.70 in September 2011 -- climbed to within $5 of $1,800 last week.
“Today gold is more or less unchanged, so it looks like the market leaders are waiting on the sidelines to see what's happening and then positioning themselves for another move,” Daniel Briesemann, a precious and industrial metals analyst at Commerzbank, said by phone. “But in general, we see gold very well supported by ongoing concerns about a second wave of coronavirus and by the loose monetary policy of most central banks.”
This week could bring fresh cues for markets. On Tuesday, Fed Chairman Jerome Powell and U.S. Treasury Secretary Steven Mnuchin are scheduled to testify before the House Financial Services Committee. The U.S. jobs report for June on Thursday may continue data-collection issues from May that appear to understate the true scale of joblessness.
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