Gold surges, climbing back above $1,800 amid investor panic over new COVID variant

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Investors flocked to the alleged haven commodity after South Africa announced a potentially highly contagious new COVID strain, with gold prices rising on Friday.

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December Gold GCZ22,
+1.41%

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GC00,
+1.49%
It gained $24.60, or 1.4%, to $1,808.90 an ounce, moving above the psychologically important $1,800 level. Wednesday closed down 50 cents, or 0.1%, at $1,784.30 an ounce, ahead of the Thanksgiving Day holiday.

Gold jumped as US stock futures and equities in Asian and Europe jumped on news of the discovery of a new COVID variant with high levels of mutation in South Africa. The version b.1.1.529 has been found in Botswana, a traveler who went to Hong Kong to a South African and a traveler who returned from Malawi in Israel.

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The World Health Organization will hold an emergency meeting on Friday to assess the variant, which scientists are still not sure is more lethal or more contagious.

A decline to the dollar was creating a tailwind for dollar-linked assets such as gold, with the ICE dollar index DXY,
-0.50%
down 0.6%.

Risk-averse action was also sending US Treasury trading sharply higher, “mitigating the risk that it had in the week before.” [that] In a note to clients, Steen Jacobsen, chief investment officer at Saxo Bank, said it “helped send gold falling below $1,835.” Yield on 10 Year Treasury TMUBMUSD10Y,
1.526%
fell 11 basis points to 1.53%.

Elsewhere, December Silver SI00,
+0.57%
It rose 12 cents to $23.525 an ounce, while December’s copper HG00,
-3.40%

HGZ21,
-3.40%
14 cents, or 3.2%, to $4.3185.

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