Gold eyes key $1,800 level on relentless rise in virus cases

Gold bounced back on Tuesday within a striking distance of the key $1,800 level as a surge in COVID-19 cases boosted hopes for further accommodative monetary policy measures and demand for the safe-haven metal.

Spot gold jumped 0.6% to $1,794.14 per ounce by 11:20 a.m. EDT (1520 GMT). US gold futures climbed 0.8% to $1,807.30 per ounce.

Gold rose to its highest since November 2011 at $1,796.09 an ounce earlier, just a few dollars away from the $1,800 psychological level.

"Whenever there is fear, that is always a supporting factor for gold, whether it's coronavirus, or fear of the economy not doing well," said Michael Matousek, head trader at US Global Investors.

"If your portfolio is underweight gold and if it looks like gold might continually start to create a new rally, you will want to add to it."

Massive stimulus measures to limit the economic damage from the coronavirus pandemic has supported gold, widely viewed as a hedge against inflation and currency debasement. Prices have gained more than 18% so far this year.

COVID-19 infections are on the rise in 39 states, according to a Reuters analysis of cases over the past two weeks, with record increases in cases in many states prompting US cities to roll back reopening plans.

Gold staged a comeback, having dropped to a session low of $1,773.37 an ounce earlier.

"We had early weakness in prices, seen as a buying opportunity by bullish traders reckoning prices will go higher from here and we indeed pushed to a new nearly nine year high in gold futures today," Kitco Metals senior analyst Jim Wyckoff.

"Gold and silver traders are also looking further down the road at the inflationary implications of all the central bank measures that have infused cash into the system."

Silver rose 0.4% to $18.28 an ounce.

Palladium slid 1.3% to $1,914.87 per ounce, while platinum jumped 2.4% to $832.49 per ounce, rising to its highest in nearly one month earlier.