Picture used for illustrative purpose. File

Gulf Today Report 

Gold prices soared on Thursday as COVID-19 cases spike across Europe making investors worried about the pace of economic recovery.

Spot gold was up 0.1% at $1,736.51 per ounce by 05:33 GMT while US gold futures were up 0.2% at $1,736.50 per ounce.

Micheal McCarthey, chief market strategist at CMC Markets said, " at these levels, gold might be catching a bit of safe-haven buying now, which is a change from what we were looking at just a few days ago." 

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Gold serves as a shield against inflation, which is expected due to widespread stimulus injected into the economy to boost growth. 

"One of the issues for gold is there seems to be two camps -for those worried about new lockdowns in Europe and ...those who have a very positive view of the economic outlook," McCarthy said, adding both these opposing scenarios are mildly supportive of gold.

Limiting gold's gains, the dollar index jumped to fresh four-month highs on concerns about extended economic lockdowns in Europe and potential US tax hikes.