Gold prices rose 1% on Friday as safe-haven buying offset a rush for cash amid fears over the economic hit from the coronavirus, but bullion was headed for a second straight weekly drop as investors sold the metal to meet margin calls in other assets.
Spot gold gained 1% to $1,484.88 U.S. per ounce early Friday morning, after a 1% fall in the previous session and was en route to post a near 3% decline for the week. U.S. gold futures climbed 0.6% to $1,487.90.
The U.S. Federal Reserve enabled central banks in nine new countries to access dollars in hopes of preventing the outbreak from causing a global economic rout.
Several countries rolled out measures to stem the economic damage, with the U.S. Senate unveiling a $1-trillion economic stimulus plan, while the Bank of England promised 200 billion pounds of bond purchases and cut its key interest rate to 0.1%.
The global economy is already in a recession as the hit to economic activity has become more widespread, a Reuters poll showed.
Among other precious metals, palladium rose 0.5% to $1,660.82 per ounce. Platinum jumped 4.6% to $613.54 but was set to post its biggest ever weekly fall.
Analysts have said platinum and palladium will remain turbulent in coming months after huge losses sparked by the spread of the coronavirus, before starting a tentative recovery with support from palladium’s supply gap and platinum’s correlation with gold.
Silver gained 3.5% to $12.54 U.S., but was on track to post its second steepest weekly decline of about 15% since September 2011.
