(Bloomberg) -- Gold headed for a third straight weekly gain as investors assessed signs of a recovery in physical demand with optimism over the U.S. labor market.

Gold shipments from Switzerland to India and China rose last month, indicating renewed buying by the top consumers after a year on the sidelines. Meanwhile, applications for U.S. state unemployment insurance unexpectedly plunged to a fresh pandemic low, signaling that the job market is strengthening, which weighed on demand for haven assets.

Traders were also mulling a proposal for higher taxes on the wealthy to help pay for President Joe Biden’s social plan. U.S. stocks had their biggest slide in five weeks on Thursday as Bloomberg News reported the Biden administration is considering almost doubling the capital gains tax rate to 39.6% for those earning $1 million or more a year.

Bullion is stabilizing near an eight-week high as bond yields trend lower, lifting the appeal of the non-interest bearing precious metal. Increasing Covid-19 cases in some parts of the world has raised concerns over the pace of global growth, although stimulus measures remain in place. European Central Bank President Christine Lagarde said Thursday that the institution isn’t discussing the phasing out of its emergency bond buying even as it sees signs that the economy is starting to shake off the pandemic.

Gold prices have been supported by the recent demand from India and China, the weaker U.S. dollar and the retreating Treasury yields, said Brian Lan, managing director of Singapore-based dealer GoldSilver Central Pte.

“The Covid pandemic now seems like it isn’t going away for some time, hence many fear the repercussions to economies and stocks and look to safe havens like gold to park their funds,” said Lan. “Gold now is trending up in the short term and $1,800 is an important level to breach for gold to move higher.”

Spot gold rose 0.2% to $1,786.80 an ounce at 11:35 a.m. in Singapore and is up 0.6% this week. Prices dropped 0.6% on Thursday after rising to $1,797.93, the highest level since Feb. 25. Silver and platinum advanced, while palladium steadied after surging to a record this week. The Bloomberg Dollar Spot Index is poised for a third weekly decline.

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