Gold slips as higher equities weigh despite rising virus cases

[BENGALURU] Gold fell on Friday as gains in US equities trimmed flows into bullion, which was still on track for a fifth straight weekly gain after soaring to its highest in nearly nine years this week on surging Covid-19 infections.

Spot gold prices slid 0.3 per cent to US$1,797.89 per ounce by 3.13 pm EDT (1913 GMT). US gold futures settled down 0.1 per cent at US$1,801.9.

On a weekly basis, gold has gained more than 1.4 per cent after rallying to its highest since September 2011 at US$1,817.71 on Wednesday.

"Gold has risen quite a bit in the past week along with exponential flows in the ETFs," said George Gero, managing director at RBC Wealth Management.

"Now that the weekend is approaching with a strong equity market, investors are taking advantage and booking profit to take positions in riskier assets."

US stocks advanced on Friday as a positive update from Gilead's antiviral drug to treat Covid-19 countered nerves over a record rise in US coronavirus cases.

More than 60,500 new Covid-19 infections were reported across the United States on Thursday, according to a Reuters tally, the largest one-day increase in any country since the pandemic emerged in China last year.

Despite its pullback on Friday, the non-yielding metal has risen over 18 per cent so far this year.

"Ten-year yields are still declining more than the inflation expectations are declining, and that's been the driver behind gold, and why we're seeing these kind of whip-saws on the day," said Daniel Ghali, commodity strategist at TD Securities.

Limiting bullion's losses, 10-year US Treasury yields dropped to their lowest since late April.

In other metals, silver was little changed at US$18.66 an ounce. It jumped to its highest since September 2019 on Thursday, putting it on track for a fifth straight week of gains.

Palladium gained 1.3 per cent to US$1,968.01 per ounce, platinum was down 1.9 per cent at US$817.94 per ounce.

REUTERS