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Gold futures were rising slightly Friday morning, but the advance for the precious metal looked likely capped as a measure of the U.S. dollar was surging back to around its highest level in about 16 months.

Reports of rising cases of COVID and lockdowns in Europe were dimming appetite for risk taking on Wall Street but helping to support interest in gold and the dollar, which are both viewed as safe-haven assets.

The ICE U.S. Dollar DXY, +0.63% was up 0.4% and around the highest level since July 2020, as Austria has announced a 20-day national lockdown to help mitigate the spread of COVID-19, and Germany, Europe’s largest economy, is considering similar measures to tamp down the spread of the deadly pathogen.

A rising dollar can hurt demand for assets priced in the currency, making them more expensive for buyers using weaker monetary units. On top of that, the dollar tends to attract interest during times of uncertainty about the global economy, weighing on bullion and other commodities.

Still, December gold GCZ21, +0.12% GC00, +0.12% was able to gain some loft on Friday, up $4.30, or 0.2%, at $1,865.70 an ounce, bringing the metal back to around its highest levels since June, following a 0.5% decline on Thursday.

“Gold did get a bump from the Austria lockdown announcement as well, especially when paired with the prospect of similar restrictions in Germany. It remains a little off its highs but could be a sign of things to come as we move into the winter,” wrote Craig Erlam, senior market analyst at Oanda Corp., in a daily note.

“As it stands, a run towards $1,900 still looks likely as the trend remains bullish but a break below $1,850 could lead to a little more softness in the near term, with $1,833 key below here,” Erlam wrote.

Meanwhile, silver for December delivery was down 5 cents, or 0.2%, to trade at $24.84 an ounce, after falling 1.1% a day ago.

For the week, gold is on track to decline 0.1% for the week, based on the most-active contract’s settlement last Friday, while silver was set for a weekly drop of 2%.

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