Gold jumps out of fear of new variant of coronavirus that worries investors

Gold rose on Friday as concerns about a new variant of the coronavirus that emerged in South Africa, which could slow the recovery of the global economy, led investors to the safety of bullion.

Spot gold jumped 0.9% to $ 1,805.26 per ounce at 0951 GMT. Gold futures in the United States totaled 1.2% at $ 1,805.20 an ounce.

The variant identified in South Africa is likely to evade immune responses and has led the United Kingdom and the European Union to halt travel from the African nation.

“Markets fear that this new variant could weigh more on the economy than the Delta mutation discovered a year ago and that has spurred a demand for gold as a safe haven asset.“Said Peter Fertig, analyst at Quantitative Commodity Research (QCR).

In a factor encouraging gold, the dollar index was down 0.4% from a 16-month high seen earlier this week, lowering the cost of bullion for buyers holding other currencies. Yields on US 10-year bonds were also weakening.

However, the metal was heading to close its worst week since Aug. 6, on rising expectations that the Federal Reserve will raise interest rates at a faster rate than anticipated.

Among other precious metals, platinum fell 2.3% to $ 972.67 an ounce; while palladium sank 2.6% to $ 1,812.28 an ounce; and silver was down 0.5% at $ 23.45 an ounce.