(Bloomberg) — Gold headed for a weekly advance on expectations there’ll be more stimulus measures to boost virus-hit economies, with RBC Capital Markets predicting allocations to bullion will increase, at least for now.“The combination of low rates, massive stimulus, and high uncertainty point toward gold allocations rising regardless of whether equity markets improve materially,” though that may not coincide with higher prices, analysts led by Helima Croft said in a note.Bullion held steady on Friday, trading near the highest in more than seven years as the pandemic triggers an unprecedented wave of stimulus from governments and central banks. With the global economy likely to suffer its worst downturn since the Great Depression this year, investors are seeking a haven from market turmoil pouring into exchange-traded funds backed by gold.RBC said it would buy bullion on pull-backs, at least until there’s enough momentum to begin to see an unwinding of global “whatever it takes” policies. “That moment will be the real test for gold,” it said.Spot gold in London was little changed at $1,729.82 an ounce at 10:27 a.m. local time after two days of gains. Comex futures for June delivery were up 0.5%, with premiums over spot rates holding above $20 an ounce.Growth worries, oil-price collapse, tensions in the Middle East, and another wave of unemployment filings in the U.S. all added to support for havens like gold this week. Sentiment in Europe took a further hit on Friday after the region’s leaders failed to come up with a longer-term stimulus program, while business confidence in Germany extended its slump.There’s the possibility of more stimulus measures soon as the Federal Reserve, European Central Bank and Bank of Japan have policy meetings next week.“In this new world in which both the ECB and the Fed continue to unleash new stimulus packages, dramatically increasing the liquidity of cash, combined with a lot of uncertainty, gold will remain in high demand,” Carlo Alberto De Casa, ActivTrades chief analyst, said in a note.In other precious metals, spot silver and platinum were little changed and palladium rose.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
