Gold Rises on Concern About The Virus, But is Heading Towards a Weekly Decline

Gold prices rose on Friday, August 13, supported by concerns about an increase in infections with the Coronavirus, but the strength of the dollar kept the yellow metal on the path of recording the second consecutive weekly decline.

Spot gold rose 0.2% to $1,756.61 an ounce.

And gold is down 0.4% for the week, mainly due to its sharp decline on Monday, after strong US jobs data renewed bets that the Federal Reserve would cut stimulus early.

US futures rose 0.5% to $1,759.70.

And the Asian markets weakened today, as they were pressured by the repercussions of the high cases with the mutated delta strain of the Coronavirus in several countries in the region.

Meanwhile, the dollar remained near a four-month high after data showed that US producer prices posted their biggest annual increase in more than a decade.

This comes on the heels of weak US consumer price data, which helped gold rise 1.3% on Wednesday, but the data prompted investors to look for more hints from the Federal Reserve on its monetary policy plans.

Gold is considered a hedge against inflation, but the Fed’s raising of interest rates will increase the opportunity cost of holding the non-yielding yellow metal while strengthening the dollar.