Gold steadied near $1,800 an ounce -- a level last seen at the end of 2011 -- as investors weighed the accelerating coronavirus spread in the US against tentative signs of economic improvement in some regions.
Futures are heading for their best quarter in four years after confirmed Covid-19 cases exceeded 10 million worldwide, with the spread of the disease accelerating in America, Brazil and India.
While massive central-bank stimulus has supported risk appetite and growth prospects, new Covid-19 clusters around the world indicate that the pandemic is far from over, aiding the outlook for havens like gold.
Citigroup raised its three-month forecast for spot prices to $1,825, maintaining its “longstanding bullish bias” for 2021.
Gold has gained 17% this year as the health crisis prompted a sustained flight to havens amid unlimited quantitative easing led by the US Federal Reserve.
Investors also continue to pile into gold-backed exchange-traded funds, which boosted their holdings by 5.6 tons last Friday to a record.
“It looks like the market leaders are waiting on the sidelines to see what’s happening and then positioning themselves for another move,” Daniel Briesemann, a precious and industrial metals analyst at Commerzbank, said.
“But in general, we see gold very well supported by ongoing concerns about a second wave of coronavirus and by the loose monetary policy of most central banks,” he said.
This week could bring fresh cues for markets. Federal Reserve chairman Jerome Powell and US Treasury Secretary Steven Mnuchin are scheduled to testify before the House Financial Services Committee.
"The US jobs report for June on Thursday may continue data-collection issues from May that appear to understate the true scale of joblessness.
"It promises to be a busy, but shortened week, with all eyes on the jobs report, released Thursday due to Friday’s US bank holiday," said Chris Beauchamp, chief market analyst at online trader IG.
"After the increasing signs of worry last week about rising infection numbers in the US, the pessimistic mood appears to be morphing into one of grim resignation – investors now hope that renewed restrictions on activity might help to turn the tide once again.
"In any case, such a move, while economically damaging, would be preferable to letting the virus rage unchecked," he said.
Wall Street’s main indexes rose following a sharp selloff last week, as investors clung to hopes of a stimulus-backed economic rebound even as coronavirus cases surged.
Better-than-estimated economic data offset concern over an increase in coranavirus cases. All main European markets rose.