NEW YORK: Gold prices rose to their highest level in nearly a week on Wednesday, as the dollar weakened and concerns over a delay in the development of a coronavirus vaccine drove investors toward the safe-haven metal.
Spot gold rose 0.7% to $1,945.20 per ounce by 2:00 pm EDT (1800 GMT), shaking off initial declines. US gold futures settled up 0.6% at 1,954.90.
"We are seeing some cracks in the dollar after the European Central Bank painted a little bit of a rosy picture and gold is moving higher on that," said Bob Haberkorn, senior market strategist at RJO Futures.
The dollar fell 0.2% after Bloomberg reported the ECB's growth and inflation projections to be published on Thursday will show only slight changes compared with the bank's June forecasts.
ECB board member Isabel Schnabel said earlier that economic developments since June have been broadly in line with the bank's expectations so the bank's "baseline" still held.
Meanwhile, global trials of AstraZeneca's experimental Covid-19 vaccine were paused due to an unexplained illness in a study participant.
The news of the delay may be indirectly supportive for gold, as it could spell a prolonged economic slowdown and further expectations of fiscal stimulus, said Saxo Bank analyst Ole Hansen.
The pandemic has forced major central banks to provide massive stimulus, helping gold gain about 28% so far this year since it is considered a hedge against potential currency debasement and inflation.
"But this rally in gold seems to be fragile," Haberkorn said. "From a technical standpoint we need gold to close above $1,950 for the bulls to take control."
Elsewhere, platinum jumped 1.8% to $917.32 an ounce. On Tuesday, the World Platinum Investment Council changed its forecast for the market in 2020 from a surplus to a deficit.
Silver rose 0.7% to $26.88, while palladium rose 0.8% to $2,292.98.
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