* Gold up more than 4% so far this week
* Silver slips, but set for best week in over three decades
* Dollar index near two-year low, equities retreat
* Interactive graphic tracking global spread of coronavirus:
* open tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)
July 24 (Reuters) - Gold resumed its march toward $1,900 on Friday as souring U.S.-China relations added fuel to a rally towards a nine-year peak driven by fears over the economic hit from the coronavirus pandemic.
Silver, meanwhile, was en route to its best week since 1987.
Spot gold was 0.3% higher at $1,892.81 per ounce by 1207 GMT, having hit its highest since September 2011 at $1,897.91 on Thursday.
U.S. gold futures rose 0.1% to $1,891.70.
“It’s the indirect effects of the virus to the economy and deep doubts whether we’re going to see a V-shaped recovery which is supporting gold,” said independent analyst Ross Norman, adding that the “fear factor around the US-Chinese spat will add fuel to the fire but won’t sustain (it)”.
If the economy did not show “quality signs” of improving, gold could clear $1,922 and continue towards $2,000.
Non-yielding gold has surged 24% this year, underpinned by low interest rates and stimulus from central banks to revive their economies, which benefits bullion since it’s a perceived safe-haven hedge against inflation and currency debasement.
China on Friday ordered the United States to shut its Chengdu consulate in retaliation for the closure of its consulate in Texas, dampening appetite for risk assets.
Further helping gold, the dollar index held near a two-year low, and was on track for its biggest weekly decline since early June.
Commerzbank analysts said the rise in gold and silver had happened “possibly too quickly,” adding in a note that this entailed “the risk of a setback, especially as gold and silver are being driven almost exclusively by extremely strong investment demand”.
Silver fell 0.5% to $22.60 per ounce, but was still up over 17% for the week, bolstered by hopes for a revival in industrial activity.
Platinum rose 0.8% to $912.64 and palladium climbed 1.7% to $2,162.28.
Reporting by Eileen Soreng and Arpan Varghese in Bengaluru, additional reporting by K. Sathya Narayanan; editing by Emelia Sithole-Matarise and John Stonestreet
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