Gold slips as investors look to dollar for safety from coronavirus woes

Spot gold was down 0.2% to $1,864.39 per ounce

  
Gold bars and coins are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, August 14, 2019.

Gold bars and coins are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, August 14, 2019.

REUTERS/Michael Dalder

Gold fell on Friday, hovering near last session's over two-month low, as investors sought shelter in the dollar from rising coronavirus cases and uncertainties over the next U.S. stimulus to aid the economy.

Spot gold was down 0.2% to $1,864.39 per ounce by 1:49 p.m. EDT (1749 GMT), while U.S. gold futures settled down 0.6% at $1,866.30 per ounce.

"The Republicans and Democrats are on the same page about putting some stimulus but they are not being able to decide the amount and that uncertainty is pushing investors towards the dollar," said Edward Moya, senior market analyst at OANDA in New York.

For the week, gold is down about 4.4% so far, the most in at least six weeks, as the dollar was set for its best week since early April.

A stronger dollar makes commodities priced in the currency, like gold, more expensive for buyers using other monetary units.

A key lawmaker said Democrats in the U.S. House of Representatives are working on a $2.2 trillion coronavirus stimulus package that could be voted on next week.

The Federal Reserve this week talked up the importance of more fiscal stimulus amid investor fears of another economic hit from the coronavirus pandemic.

Stocks were set to fall by the most for any week since June as concerns over second wave of virus-related lockdowns weighed on investors' risk appetite.

The risk for gold bugs is limited to an extension of the global risk-off that catalyzed the dollar's breakout, TD Securities analysts said in a note.

"On the other hand, the growth scare has particularly impacted platinum, as a second wave may further hit the horrible diesel sales in Europe."

Platinum edged down 0.1% to $847.81, while silver fell 0.8% to $23.02 per ounce. Both metals were headed for their worst week since March 20.

Palladium was down 0.2% at $2,221.20 per ounce.

(Reporting by Arundhati Sarkar and Diptendu Lahiri in Bengaluru Editing by Marguerita Choy and Steve Orlofsky) ((Arundhati.Sarkar@thomsonreuters.com; twitter.com/Arundhati_05; +1 646 223 8780 Ext: 2776;))

More From Commodities