Gold slips as investors book profits

Bengaluru — Gold eased on Thursday as investors booked profits from a near 2% rally in the previous session, while US stimulus measures to ease the economic blow from the coronavirus outbreak limited losses and kept prices above $1,700/oz.

Spot gold slipped 0.3% to $1,707.76/oz by 3.05am GMT, after gaining as much as 1.9% in the previous session. US gold futures fell 0.3% to $1,733.40/oz.

“The market is probably more inclined to take profit on gold, simply because they are nearing the highs of the recent range,” said Stephen Innes, chief market strategist at financial services firm AxiCorp.

“The US kicked in more stimulus, which is really positive for gold because it increases fiscal deficits in the country. And with these low interest rates staying low, this is just a welcoming relief.”

Against key rivals, the dollar climbed to a more than two-week peak earlier in the session, making gold costlier for investors using other currencies.

Asian stock markets rose on Thursday as the combination of a rebound in crude prices from historic lows and the promise of more US government aid to cushion the coronavirus-ravaged economy helped calm nervous markets.

The US House of Representatives expects to pass a nearly $500bn coronavirus relief bill on Thursday but will put off any decision on changing its voting rules during the pandemic, avoiding a potential partisan fight.

“In a nutshell, gold investors are more impressed with the bullish aspect of more fiscal spending than with the bearish impact of higher equities,” Innes said.

The pandemic has prompted governments and central banks around the world to unleash unprecedented fiscal and monetary support for economies.