Gold prices jumped over 3% while platinum surged over 8% on Friday, as precious metals rebounded sharply on a lull in the rush for cash after global action to reduce the economic impact of the coronavirus lifted market sentiment.
Spot gold was up 2.2% at $1,501.83 per ounce at 1217 GMT, having risen as much as 3.1% earlier. It fell 1% on Thursday, and is en route to a 2% weekly decline. U.S. gold futures climbed 1.8% to $1,505.70.
Platinum rose 4.4% to $612.03, having risen as much as 8.5% earlier. But the metal is still set to post its biggest ever weekly fall.
“This (rising precious metals prices) could be a dead cat bounce,” said Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS.
“There is speculative interest in gold and other risky assets, as the market is betting on a technical rebound, but it may not hold for very long, assuming the U.S. situation is getting worse due to the virus.”
European shares jumped for a second straight day as fiscal and monetary stimulus lured investors back into equities.
The U.S. Federal Reserve opened the taps for central banks in nine new countries to access dollars in hopes of preventing the outbreak from causing a global economic rout.
Several countries rolled out measures to stem the economic damage, with the U.S. Senate unveiling a $1 trillion stimulus plan, while the Bank of England promised 200 billion pounds ($236 billion) of bond purchases and cut its key interest rate.
“We have strong gains over various asset classes, markets are recovering on monetary and fiscal policy measures to weather the economic impact of the virus,” said Quantitative Commodity Research analyst Peter Fertig.
“If risk appetite increases, you don’t stay in safe havens… but with rising stock and bond prices, the pressure on gold is easing.”
However, pointing to the growing economic risks, the number of Americans filing for unemployment benefits surged by the most since 2012 last week.
Elsewhere, palladium fell 1.1% to $1,634.57 per ounce.
Platinum and palladium will remain turbulent in coming months, analysts said.
Palladium could fall below $1,000 if global GDP continues to be hampered by the virus, and silver below $10, GFMS’ Li said.
Silver gained 4% to $12.60 an ounce, but was set to be down for the second straight week.
($1 = 0.8480 pounds)