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Gold price heads for sixth straight weekly gain

Zooming in on new highs. Credit: Miguel Nunes | Flickr.

Gold returned above $1,800 an ounce on Friday, heading for its sixth consecutive weekly gain, as surging coronavirus cases continue to drive up demand for safe haven assets.

Spot gold climbed 0.5% to $1,807.63 per ounce by 1:00 p.m. EDT. Gold futures for August delivery also rose 0.5%, up to $1,809.50 per ounce.

On Thursday, the number of new coronavirus cases in the US topped 77,000 for the first time, according to Reuters data, leading to more partial shutdowns across the country.

“We could see a push towards $2,000 before the end of this year”

Afshin Nabavi, SVP, MKS SA

“As long we don’t have a vaccine, we will continue to have these problems … We could see a push towards $2,000 before the end of this year,” Afshin Nabavi, senior vice president at precious metals trader MKS SA, told Reuters.

The ongoing pandemic is not the only driver of investment in safe-haven assets. Tensions between the US and China are also prompting people to invest more in gold rather than stocks, Nabavi said.

Many analysts believe that the price of gold, which has risen by nearly 17% so far this year, still has room to grow as long as uncertainties still reign above virus-hit economics.

Earlier this month, Haywood Securities raised their gold price forecast for the second half of 2020, citing that the precious metal is “now in the early days of a new bull market,” adding that they “would not be surprised” to see gold push through the old 2011 high of $1,923 per ounce this year.

On Tuesday, the World Gold Council reaffirmed that the pandemic will likely have a lasting effect on asset allocation and continue to reinforce the role of gold as a strategic investment asset for the remainder of the year.