NEW YORK: Gold prices rose more than 1% on Friday, consolidating near the pivotal $1,800 level as the discovery of a new coronavirus variant hammered sentiment in global financial markets and pushed investors to safe havens. Spot gold rose 0.6% to $1,798.70 per ounce by 1010 a.m. ET (1510 GMT) and US gold futures rose 0.8% to $1,798.60.

Little is known of the new variant detected in South Africa, Botswana and Hong Kong. But it has prompted the European Union, Britain and India to announce stricter border controls, causing US stocks to drop sharply. “With worries of resurgence of Covid, we’re starting to see investors go back into gold and really looking at it as an alternative to the equity markets,” said Chris Gaffney, president of world markets at TIAA Bank.

The dollar fell 0.6%, making gold cheaper for holders of other currencies, while US 10-year Treasury yields also weakened. “The gold price should remain supported in this environment and the topic of (Fed) tapering should take a back seat for the time being,” said Alexander Zumpfe, a precious metals dealer at Heraeus.

The safe-haven inflows put gold on track for its best day since mid-November. Despite Friday’s jump, gold was still headed for its worst week since early August, down 2.4% so far, pressured by expectations that the US Federal Reserve could hasten interest rate rises.

Reduced stimulus and interest rate increases translate into a higher opportunity cost for holding non-interest-bearing gold. Elsewhere, platinum fell 3% to $965.92 while palladium dropped 6.4% to $1,741.51, en route to a weekly decline of 6.1% and 15.1% respectively.

Quantitative Commodity Research analyst Peter Fertig attributed palladium and platinum’s declines to fears the new variant could hurt the global economy again, including car sales and demand for the metals used in automobile exhaust systems. Spot silver dipped 1.3% to $23.28, on track for a 5.3% weekly drop.