Gold prices rose on Friday and were on course for their biggest weekly gain since January 2009 as the global spread of the coronavirus dimmed growth prospects and sent investors scurrying for safe-haven assets.
Spot gold was up 0.5% at $1,678.25 per ounce. Earlier, it touched a high of $1,689.65, or 1.2%, its highest since January 2013. Prices are up around 6.3% so far this week. U.S. gold futures rose 0.5% to $1,679.50.
"The usual out of risky assets into safe havens" flow is fuelling gold's rise, driven by concerns about the economic fallout from the virus, said Peter Fertig, an analyst at Quantitative Commodity Research.
Earlier on Friday, gold prices reversed course, dipping alongside other commodities like oil, after OPEC reportedly failed to reach a deal.
Gold tumbled alongside oil prices, which sank 7% to multi-year lows as OPEC's allies reportedly rejected additional production cuts proposed by OPEC on Thursday, according to a report from Reuters. There are also reportedly questions over whether the existing production cuts will be extended, Reuters said. The meeting between OPEC and its allies, known as OPEC+, is underway in Vienna after talks were delayed.
Gold is on pace for its biggest weekly gain since January 2009 as the global spread of the coronavirus dimmed growth prospects and sent investors scurrying for safe-haven assets.
"The market has no understanding of what's going on. Investors are buying bonds as well as gold as insurance from the deteriorating economic outlook," said SP Angel analyst Sergey Raevskiy.
Globally, there have been more than 98,000 cases and over 3,300 deaths from the coronavirus. The International Monetary Fund on Wednesday said the outbreak would hold 2020 global output gains to their slowest pace since the 2008-2009 financial crisis. The epidemic poses "evolving risks" to the U.S. economy and central bank officials are monitoring developments closely, New York Federal Reserve President John Williams said on Thursday.
"Gold is looking to be one of the most attractive assets to own now as short term interest rates fall to near zero and most equity earnings are also expected to fall," Phillip Futures analysts said in a note. "However a drastic and prolonged drop in equity prices may not be good for gold as traders cash in from gold to pay off margin calls in equity."
The U.S. Federal Reserve made an emergency 50 basis point interest rate cut on Tuesday. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
Elsewhere, palladium rose 3.1% to $2,610.80 per ounce. The autocatalyst metal had hit an all-time high of $2,875.50 in late February.
Silver was up 0.2% to $17.45 an ounce, while platinum rose 4.1% to $900.08.