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Gold Rises After Weak Eurozone GDP Data

Gold rose sharply on Friday and headed for its biggest monthly gain in 8-1/2 years, driven by weak U.S. dollar on worries about surging coronavirus cases and the economic outlook.

Spot gold climbed 0.9 percent to $1,974.83 an ounce, while U.S. gold futures were up as much as 1.5 percent at $1,971.20.

The U.S. dollar fell overnight and kept falling in Asian trading today in reaction to worrying GDP and unemployment claims figures, delay on stimulus bill and a continued surge in coronavirus cases across the world.

President Donald Trump exacerbated investor nervousness by floating the possibility of delaying the U.S. presidential election.

Risk sentiment improved somewhat earlier in the day following encouraging economic data from China and Japan as well as upbeat earnings updates from U.S. technology giants Amazon, Apple, Alphabet and Facebook.

The optimism soon faded after Eurostat said the euro area economy contracted at the fastest pace on record in the second quarter amid the coronavirus pandemic.

According to preliminary flash estimate, GDP fell 12.1 percent on a quarterly basis, bigger than the 3.6 percent drop in the first quarter.

This was bigger than the economists' forecast of 11.2 percent and was the sharpest decline seen since the series began in 1995.

Year-on-year, GDP was down 15 percent in the second quarter versus a 3.1 percent decline a quarter ago.

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