Gold slips as traders put toes back into equities
Metal loses ground as investors reassess the economic effect of the coronavirus
Gold eased from an over one-week peak on Friday as risk sentiment improved on hopes of global measures to soften the impact of the coronavirus outbreak, but a surge in new cases capped bullion’s losses and kept it on track for a weekly gain.
Spot gold was down 0.1% at $1,574.69/oz as of 4.27am GMT, having touched its highest since February 4 at $1,577.89/oz earlier in the session.
US gold futures also slipped 0.1% to $1,577.80/oz.
"The equities market has shrugged off the bearish sentiment and has started to move higher as investors are reassessing the potential [economic] impact of the virus," Margaret Yang Yan, a market analyst at CMC Markets, said, adding that a strong dollar is also putting pressure on bullion.
Asian shares were on course to post their second straight week of gains, while the US dollar, which has also seen steady interest as a safe haven amid fears over the virus, rose to a more-than four-month high against key rivals.
However, analysts said interest in gold remained intact as the death toll in China’s Hubei province rose by 116, with the total number of cases up by nearly 5,000.
The safe-haven metal has risen by about 0.3% so far this week.
Expectations that the virus could hurt the global economy as well as easy monetary policy from central banks are keeping gold attractive in the market, Yan said.
Investors were now looking out for US retail sales and consumer confidence numbers due later in the day.
"The US consumer is really the biggest piece of global growth at this point with China getting a hit due to the trade war and the virus, Europe is still sluggish," said Ilya Spivak, a senior currency strategist at DailyFx.
Gold is often used as a safe store of value during times of political and financial uncertainty.
Elsewhere, palladium rose 0.6% to $2,438.78/oz, silver gained 0.1% to $17.65/oz, while platinum was up 0.3% at $970.92/oz.
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