Gold jumped more than 1% on Friday to levels last seen in 2012, as renewed U.S.-China trade tensions added to concerns about a deep economic slump due to the coronavirus pandemic.
Spot gold rose 0.7% to $1,741.65 per ounce. During the session it hit its highest since November 2012 at $1,751.25. Bullion has risen over 2% so far this week. U.S. gold futures settled 0.9% higher at $1,756.30.
"While subdued physical demand and central bank buying may have slowed its ascent, there's very little reason to sell gold in a time of unprecedented public largesse and deteriorating relations between the world's economic super powers," said Tai Wong, head of base and precious metals derivatives trading at BMO.
Underpinning the damage inflicted by the outbreak was the latest U.S. retail sales data that showed a second straight month of record declines in April.
Adding to the bleak economic scenario was renewed friction between the United Sates and China over the outbreak, with President Donald Trump suggesting he could even cut ties with Beijing.
"People are reluctant to take risk and the future seems quite uncertain... Gold gives you that sense of protection right now because we're going into this period," said Phil Streible, chief market strategist at Blue Line Futures in Chicago.
The novel coronavirus, which has infected over 4.46 million people and killed 301,445, has hammered global economic activity, prompting central banks and governments to unleash massive stimulus measures. Gold tends to benefit from economic stimulus because it is widely viewed as a hedge against inflation and currency debasement.
Though many governments have started easing restrictions, the move has rekindled concerns of a second wave of infection.
"Given all of this chaos and confusion, it is hardly surprising that gold ETFs are seeing an unchanged high level of buying interest," analysts at Commerzbank said in a note. "If speculators were now to jump on the bandwagon too, gold would rise quickly towards the $1,800 mark."
SPDR Gold Trust holdings, the world's largest gold-backed exchange-traded fund, jumped 1.2% to 1,104.72 tonnes on Thursday - its highest in more than seven years.
Elsewhere, palladium climbed 1.9% to $1,870.28 per ounce, but was on track to post its seventh straight weekly drop. Platinum rose 3.2% to $792.24 per ounce, having hit a high since March 13 at $796.
Silver was 4.3% higher $16.55. It touched a more than two-month peak of $16.71 earlier.