Gold sets sights on $1,900/oz mark as haven flows gather steam
* Gold up more than 4% so far this week
* Silver slips, but headed for best week in over three decades
* Dollar index near two-year low, equities retreat (Recasts, adds comments, updates prices)
By Eileen Soreng
July 24 (Reuters) - Gold resumed its march toward $1,900 on Friday as an escalation in the U.S.-China spat added further safe-haven fuel to a rally to a nine-year peak driven by fears over the economic hit from the coronavirus pandemic.
Silver, meanwhile, was en route to its best week since 1987.
U.S. gold futures
"It's the indirect effects of the virus to the economy and deep doubts whether we're going to see a V-shaped recovery which is supporting gold," said independent analyst Ross Norman, adding "fear factor around the US-Chinese spat will add fuel to the fire but won't sustain".
"If the economy doesn't show quality signs of improving you could see further flows into gold and it would just stride majestically over $1,922 and continue higher up towards $2,000."
Non-yielding gold has surged 24% this year, underpinned by low interest rates and stimulus from central banks to revive their economies, which benefits bullion since it's a perceived hedge against inflation and currency debasement. In the latest flare-up, China ordered the United States to shut its Chengdu consulate in retaliation for the closure of its consulate in Texas, dampening risk assets. [ nB9N2EM03G] [MKTS/GLOB]
Further helping gold, the dollar index held near a two-year low, and was on track for its biggest weekly decline since early June. [USD/]
However, the rise in gold and silver has happened "very quickly – possibly too quickly," Commerzbank analysts said in a note, adding this "entails the risk of a setback, especially as gold and silver are being driven almost exclusively by extremely strong investment demand".
https://tmsnrt.rs/39nkWKN Silver's resurgence
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Eileen Soreng and Arpan Varghese in Bengaluru, additional reporting by K. Sathya Narayanan; editing by Emelia Sithole-Matarise) ((email@example.com; Within U.S. +1 646 223 8780, Outside U.S. +91 80 6749 6131; Reuters Messaging: firstname.lastname@example.org)) Keywords: GLOBAL PRECIOUS/ (UPDATE 4)