Gold slips as dollar firms amid second wave of coronavirus infections
· Gold prices dropped on Monday, as thedollar hovered close to a more than one-week high, despite fearsof a second wave of coronavirus infections in Beijing dentingrisk appetite.
· Spot gold was down 0.5% at $1,720.56 per ounce as of0640 GMT. U.S. gold futures slipped 0.7% to $1,725.30.
· "Gold is caught between two conflicting forces. One is therisk-off force weighing on stocks and industrial commodities andsupporting bonds and gold," said Michael McCarthy, chiefstrategist at CMC Markets.
"But against that we have a stronger U.S. dollar."
· Gold prices jumped 2.6% last week, marking their best weeksince April 10, as worries of a new wave of COVID-19 casesclouded hopes of economic recovery.
· After weeks with almost no new coronavirus infections,Beijing has recorded dozens of new cases in recent days, whilenew virus cases and hospitalizations in record numbers sweptthrough more U.S. states.
· Rising concerns about a resurgence of the disease dentedrisk sentiment among investors, sending Asian stock markets andoil prices lower.
· "The economy is not doing well, we got COVID-19 again and alow interest rate environment, I think gold remains bid," saidStephen Innes, chief market strategist at financial servicesfirm AxiCorp.
"But, we need significant policy input from the U.S. FederalReserve or governments to add that fourth level of stimulus toget gold to bounce higher."
· Underscoring the impact of the virus, data showed China'sindustrial output expanded less than expected in May as thecountry struggles to get back on track.
· SPDR Gold Trust holdings rose 0.1% on Friday, whilespeculators cut their bullish positions in COMEX gold and silvercontracts in the week to June 9.
· Elsewhere, palladium was down 0.9% at $1,901.68 perounce, silver fell 2.1% to $17.08, platinum eased0.2% to $803.77.
Reference: Reuters
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