NEW YORK: Gold bounced back on Tuesday, within a striking distance of the key $1,800 per ounce level, as a sharp jump in Covid-19 cases boosted hopes for more accommodative monetary policy measures and demand for the safe-haven metal.
Spot gold jumped 0.7% to $1,796.08 per ounce by 2:01 p.m. EDT (1801 GMT). US gold futures settled up 0.9% at 1,809.90 per ounce, having earlier hit its highest since September 2011 at $1,810.80.
Gold rose to its highest since November 2011 at $1,796.80 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.
The surge in US coronavirus cases has made business owners "nervous again," Atlanta Federal Reserve Bank President Raphael Bostic said on Tuesday.
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 0.6% to $18.31 an ounce. Palladium slid 0.8% to $1,923.01 per ounce, while platinum jumped 2.8% to $835.88, rising to its highest in nearly one month earlier.
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