By Barani Krishnan
Investing.com - Gold prices settled up Friday as a hedge against ramping Covid-19 cases and a feared second national U.S. lockdown at some point.
But the rise wasn't enough to prevent the yellow metal from posting its worst weekly loss since September, triggered by early selling in the week after market hype on progress over a Pfizer Inc (NYSE:PFE) vaccine for the virus.
New York-traded gold for December delivery settled up 0.7% at $1,886.20.
For the week, it lost 3.4%, its most for a week since late September.
Investors' over-exuberance with progress reported by Pfizer on its Covid-19 vaccine trials triggered a massive rally in risk assets on Monday that led to a 4.5% plunge in gold — the safe-haven's worst day since August.
But as the week wore on, the extremely challenging storage conditions for the Pfizer vaccine as well as delivery logistics have become clearer, diminishing those market gains.
On the infection front, U.S. Covid-19 cases hit another daily record high on Thursday, with 153,000 reported, making it the 10th-straight day where the infection count stood at above 100,000. According to Johns Hopkins University, some 10.6 million Americans have contracted the virus so far, while more than 240,000 have died from complications caused by it.
Michael Osterholm, a top advisor on President-elect Joe Biden's coronavirus task force, on Thursday floated the idea of shutting down U.S. businesses over four to six weeks to control the spread of the pandemic. If enforced, it would be the second nationwide lockdown since the March-May stay-home orders that curbed the first wave of the outbreak.
That helped gold pare some of its losses as the week wound to a close.
"There is fear of a second wave with lockdowns and restrictions and the market has to work through (some) stimulus" for the U.S. economy, said Eli Tesfaye, senior market strategist at RJO Futures. "So, the market at some point has to anticipate that cash and price in the potential inflation."