The prices of gold eased back on Tuesday as concerns over the rising coronavirus death toll were overshadowed by a stronger U.S. dollar and profit booking.
U.S gold futures increased by 0.1% to $1,685.70 an ounce but spot gold prices dropped by 0.1% to $1,646.26 an ounce as of 0559 GMT.
Yesterday, the dollar recorded its worst decline against a basket of rival currencies in almost two weeks. But today, the greenback gained 0.1% which made gold more expensive for investors who are using other currencies.
COVID-19 has already infected more than 1.3 million and killed more than 76,000 people around the world. There were some encouraging improvements in containing the coronavirus but the number of infections and death are still growing in most highly populated countries.
In New York, the number of COVID-19 deaths had the largest increase yesterday. In Spain, the death toll rose again after five days of zero fatality. In China, the number of new infections increased by almost two-fold in just one day because of coronavirus-positive travelers.
According to Phillip Futures senior commodities manager Avtar Sandu, the yellow metal will likely be affected by news headlines in the short term, but the market fundamentals remain bullish in the long term.
Other Phillip Futures analysts commented that the precious metal will benefit from the continuing uncertainty as a result of the COVID-19 pandemic. They highlighted the fact that the virus has not been completely managed or contained. Margaret Yang Yan, an analyst with CMC Markets, added that the monetary policy easing and stimulus efforts by major central banks will be positive for the bullion in the mid to long term.
Meanwhile, the Asian stock markets had mixed results as investors’ optimism waned because the number of COVID-19 deaths around the globe continues to grow.
Most governments and central banks have already launched unprecedented stimulus measures to support their economies from the effect of the coronavirus outbreak. In Japan, Prime Minister Shinzo Abe yesterday declared a state of emergency and released an almost $1 trillion stimulus package.