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Gold on Monday edged toward a near 8-year high hit last week as a spike in coronavirus cases kept safety demand elevated, although robust equities and positive U.S. services sector data limited the metal’s advance.

Spot gold rose 0.5% to $1,783.75. U.S. gold futures settled up 0.2% at $1,793.50 per ounce.

“Investors are doubtful that this recovery is going to remain as resilient because we’re all expecting that snapback ... and we might have a longer recovery, and that should be supportive for gold prices,” said Edward Moya, senior market analyst at broker OANDA.

In the first four days of July alone, 15 U.S. states have reported record increases in new cases of COVID-19, while cases continued to soar in countries including India, Australia and Mexico.

Brushing aside a surge in new coronavirus cases, U.S. stocks rose after an unexpected growth in the U.S. services sector and on hopes of a China-led recovery from an economic slump brought on by the coronavirus outbreak.

The Institute for Supply Management’s (ISM) non-manufacturing data showed U.S. services industry activity rebounded sharply in June, almost returning to its pre-COVID-19 pandemic levels.

“The biggest risk is if the data continues to outperform, that would possibly derail some of those calls for additional stimulus,” Moya added.

Non-yielding bullion has risen 17.5% so far this year, prompted by stimulus measures and interest rate cuts by central banks. Gold hit $1,788.96 last week, the highest level since October 2012.

“With 10y breakevens continuing to print new post-Covid highs, the normalization in inflation expectations may remain a powerful driver lifting gold prices deeper into $1,800 per ounce territory,” TD Securities wrote in a note.

Palladium fell 0.1% to $1,921.69 an ounce, while platinum was up 2.3% at $818.28 per ounce. Silver gained 1.1%, at $18.24 per ounce.

Reference: CNBC