Gold slips as higher equities weigh despite rising virus cases

Twenty kilogram gold and silver bricks sit at the ABC Refinery smelter in Sydney, New South Wales, Australia, on Thursday, July 2, 2020.
David Gray | Bloomberg via Getty Images

Gold fell on Friday as gains in U.S. 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% to $1,797.89 per ounce. U.S. gold futures settled down 0.1% at $1,801.9.

On a weekly basis, gold has gained more than 1.4% after rallying to its highest since September 2011 at $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."

U.S. stocks advanced on Friday as a positive update from Gilead's antiviral drug to treat COVID-19 countered nerves over a record rise in U.S. 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% 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 U.S. Treasury yields dropped to their lowest since late April.

In other metals, silver was little changed at $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% to $1,968.01 per ounce, platinum was down 1.9% at $817.94 per ounce.