Gold prices edged lower on Monday, trading in a narrow range, as fears of a second wave of coronavirus infections in Beijing cut investors’ appetite for riskier assets.
Spot gold was down 0.2 per cent $1,725.90 per ounce as of 0547 GMT. US gold futures eased 0.3 per cent to $1,732.50.
The metal climbed 2.6 per cent last week, posting its biggest weekly gain since April 10.
“The economy is not doing well, we got Covid-19 again and a low interest rate environment, I think gold remains bid,” said Stephen Innes, chief market strategist at financial services firm AxiCorp.
“But, we need significant policy input from the US Federal Reserve or governments to add that fourth level of stimulus to get gold to bounce higher.”
After weeks with almost no new coronavirus infections, Beijing has recorded dozens of new cases in recent days, while new virus cases and hospitalizations in record numbers swept through more US states.
Rising concerns about a resurgence of the disease dented risk sentiment among investors, sending Asian stock markets and oil prices lower.
“In the larger picture, gold still lacks the momentum required to crack its longer-term $1,660.00 to $1,760.00 an ounce range,” said Jeffrey Halley, senior market analyst at OANDA in a note.
The Fed expects household finances and business balance sheets to suffer “persistent fragilities” due to the shock to economic activity arising from the pandemic.
Underscoring the impact of the virus, data showed China’s industrial output expanded less than expected in May as the country struggles to get back on track.
SPDR Gold Trust holidngs rose 0.1 per cent on Friday, while speculators cut their bullish positions in COMEX gold and silver contracts in the week to June 9.
Elsewhere, palladium was down 0.4per cent at $1,910.76 per ounce, silver fell 1per cent to $17.27, platinum dropped 0.7per cent to $800.25.
