The precious metal is in demand amid falling yields on bonds and stock markets due to increased worries for the global economy due to the spread of the coronavirus
Gold rallied on Friday amid volatile trading and should post a third straight week rally as concerns over the rapidly spreading delta COVID-19 variant and falling US Treasury yields have boosted the metal's appeal as a safe haven asset.
Spot gold rose 0.1% to $1803.92 an ounce by 07:25 GMT, up 0.9% from the start of the week. US gold futures rose 0.1% to $ 1802.10.
Falling bond yields and concerns about the potential impact of the COVID-19 Delta option on global growth are helping gold, according to Stephen Innes, managing partner of SPI Asset Management.
“However, the dollar remains largely supportive and I think that in itself is limiting the movement of gold,” he added.
The benchmark yield, 10-year US Treasury bonds, fell to a four-month low, while the US dollar rose 0.1% to a three-month high in the previous session.
Sentiment in stock markets around the world remained volatile as the Delta option threatened the global economic recovery, causing Asian stocks to plunge to a two-month low.
The minutes of the June policy meeting of the US Federal Reserve released Wednesday showed that while the economic recovery was "generally considered incomplete," Fed officials agreed that they must be prepared to act if inflation or other risks materialize.
Fears of an imminent monetary tightening by the Fed put pressure on the precious metal, causing gold to plunge 7% in June.
“The key psychological level of $ 1800 an ounce acts as a barrier to gold. Once it is broken through some time later, we will be able to see new tech purchases, ”said Harshal Barot, Senior Research Consultant South Asia at Metals Focus.
Palladium rose 0.1% to $ 2,809.18 an ounce, while platinum remained unchanged at $ 1,075.02. Silver fell 0.1% to $ 25.88, signifying a weekly decline.
