Gold prices rose on Monday as worries over a surge in COVID-19 infections globally dented optimism about a swift economic rebound, driving investors towards the safe-haven metal.

Spot gold was up 0.2% at $1,773.41 per ounce by 0506 GMT. Prices were $5.65 shy of a near eight-year high of $1,779.06, hit last week.

U.S. gold futures rose 0.5% to $1,788.40 per ounce.

“Certainly the safe-haven buying is coming through fairly strong, with the fresh outbreak of coronavirus in the U.S., in particular, really driving that investor appetite at the moment,” said ANZ analyst Daniel Hynes.

California ordered some bars to close on Sunday, following similar moves in Texas and Florida, as cases nationwide soar to record levels each day. Washington state and the city of San Francisco have paused re-opening plans.

Relentless spread of the coronavirus intensified investor fears about a delay in global economic recovery and weighed on risk appetite, driving inflows into safe-haven assets.

The outlook for a global economic recovery over the past month has worsened or at best stayed about the same, according to a firm majority of economists in Reuters polls.

Gold is used as a safe investment during times of political and financial uncertainty.

Indicative of sentiment, SPDR Gold Trust, holdings rose 0.3% to 1,178.90 tonnes on Friday, while speculators increased their bullish positions in COMEX gold and silver contracts in the week to June 23.

On the technical side, spot gold is poised to break a resistance at $1,778 per ounce and rise to $1,789, said Reuters technical analyst Wang Tao.

Elsewhere, palladium gained 0.9% to $1,877.14 per ounce, while platinum rose 1.6% to $803.31 and silver climbed 0.8% to $17.89.

SOURCE: REUTERS