Gold edges below key level

Bengaluru — Gold prices slipped below the key $1,800 level on Tuesday, as the US dollar strengthened, though worries over surging coronavirus cases globally and Sino-US tensions put a floor under bullion prices.

Spot gold was down 0.3% at $1,797.45 an ounce by 2.32am GMT. US gold futures fell 0.8% to $1,799.60.

“We are seeing pressure on risk assets given the sentiment and concerns, particularly about China and US relations. We would have expected gold to find more support than currently is,” said Michael McCarthy, chief strategist at CMC Markets.

“The reversal of dollar weakness is knocking gold around a little at the moment, particularly given that prices are around nine-year highs.”

The dollar index rose 0.1% against its rivals, making gold more expensive for holders of other currencies.

The Covid-19 pandemic will worsen if countries fail to adhere to strict health-care precautions, the World Health Organisation warned on Monday, as coronavirus cases globally passed 13-million.

California’s governor ordered a retreat from the state’s reopening as infections soared, while Canada and the US are likely to extend bans on non-essential travel imposed to fight the outbreak.

Apart from the pandemic, renewed concerns about diplomatic tension between the US and China also dented risk appetite, capping losses in bullion, which is considered a hedge against political and financial uncertainty.

Reflecting increased investor interest in gold, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.3% to 1,203.97 tonnes on Monday.

Market participants await release of data on Chinese GDP, retail sales, industrial output and exports.

Elsewhere, palladium slipped 0.4% to $1,971.78 an ounce, while platinum rose 0.3% to $831.05. Silver dropped 0.5% to $18.98 an ounce, after hitting its highest since September 2019 on Monday.

Reuters