JOIN USGold slips as stronger dollar outweighs coronavirus worries
Gold prices eased on Wednesday as a stronger dollar and profit-taking outweighed risk-off sentiment due to concerns over rising deaths across the globe from the novel coronavirus. Spot gold fell 0.1% to $1,646.26 per ounce by 0559 GMT, after climbing to its highest since March 10 on Tuesday at $1,671.40. U.S. gold futures rose 0.1% to $1,685.70 per ounce.
"Fundamentals are still bullish, but in the short term the market will take cues from every bit of news that pops up," said Avtar Sandu, a senior commodities manager at Phillip Futures, adding that a firmer dollar and profit-taking kept prices lower.
Asian stocks were mixed after two sessions of sharp gains as investors tempered their optimism about the coronavirus while death tolls were still mounting across the globe. "Uncertainty continues to weigh on risk sentiment, which is positive for gold in the longer term," Phillip Futures analysts said in a note, adding that the coronavirus "has not been completely managed."
The novel coronavirus has infected more than 1.3 million people and killed over 76,000 globally, and though the numbers are still rising in many highly populated countries, tentative improvements have given hope.
New York state, the U.S. epicentre of the pandemic, reported its sharpest single-day spike in fatalities and Spain's daily toll of deaths rose for the first time in five days, while new cases in mainland China nearly doubled in 24 hours due to infected overseas travellers. In a bid to support economies hammered by the outbreak, governments and central banks around the world have unleashed unprecedented fiscal and monetary stimulus.
Japanese Prime Minister Shinzo Abe on Tuesday declared a state of emergency to fight the outbreak and rolled out a nearly $1 trillion stimulus package to soften the economic blow.
"In the mid to long term, gold has upside due to quantitative easing and monetary stimulus efforts by global central banks," said CMC Markets analyst Margaret Yang Yan. Weighing on bullion, the dollar was up 0.1% against key rivals, making gold costlier for investors holding other currencies.
On Tuesday, the greenback posted its worst drop against a basket of currencies in nearly two weeks. Palladium rose 1% to $2,197.09 an ounce, while platinum gained 0.7% to $739.02 per ounce. Silver rose 0.3% to $15.05 an ounce, having touched a more than three-week high in the previous session.