Gold traded near an eight-week high as a surge in global coronavirus cases and curbs stoked demand for the haven, which has been supported by lower U.S. real yields, a weaker dollar, and slumping equities.
Bullion has made a strong start to the new year, with the variant strain of the coronavirus first identified in the U.K. now found in New York State. U.K. Prime Minister Boris Johnson ordered a national lockdown in England starting from Monday night until mid-February. Global coronavirus infections climbed above 85 million, after daily cases in the U.S. soared to a record of nearly 300,000.
Gold’s climb builds on the precious metal’s biggest annual gain in a decade, as virus angst clouds the outlook for the recovery. The spread of Covid-19 throughout the festive period and tighter restrictions will have a significant toll on the economy, albeit one that’s consigned mostly to the first quarter thanks to vaccines, according to Craig Erlam, senior market analyst at Oanda Corp.