Gold prices touched a one-week high on Monday propped up by a weaker dollar, while mounting US coronavirus cases escalated concerns of the pandemic’s impact on economic recovery underpinning hopes of further monetary stimulus.
Spot gold rose 0.5 percent to $1,896.85 per ounce by 0329 GMT, after hitting its highest level since November 9 at $1,898.81 earlier in the session.
US gold futures were up 0.5 percent at $1,894.90.
The dollar index was down 0.2 percent making bullion cheaper for holders of other currencies.
“There are still underlying problems in structural economies, with job creations being the biggest problem,” said Stephen Innes, chief global market strategist at financial services firm Axi.
“Central banks are going to keep the markets flushed enough to bridge this gap between now and the vaccine.”
Germany’s Economy Minister Peter Altmaier said the country should brace for another 4-5 months of severe measures to halt the outbreak.
US Federal Reserve Chairman Jerome Powell repeated last week his view that more action from the central bank and Congress, in the form of further fiscal stimulus, would likely be needed.
Gold, which tends to benefit from stimulus measures from central banks as it is considered a hedge against inflation and currency debasement, has soared gold 25 percent higher this year.
Prices fell 3.3 percent last week after Pfizer said its experimental COVID-19 vaccine was over 90% effective based on initial trial results.
“From a technical point of view gold may face some resistance around $1,900-$1,905,” said Howie Lee, economist at OCBC Bank, adding, the bullion’s move higher depends on clarity on fresh U.S. fiscal stimulus.
Silver gained 1.5 percent to $25.01 per ounce. Platinum rose 1.2 percent to $899.83, while palladium was 0.7 percent higher at $2,341.06.