Spot gold rose 0.1 per cent to $1,697.67 per ounce by 0304 GMT, after falling for two straight sessions.
Gold prices were steady in early Asian trade on Tuesday after two straight sessions of falls, as a stronger dollar countered fears of a new wave of coronavirus infections in many countries.
Gold rose as the metal’s safe-haven appeal was boosted by growing worries about a second wave of coronavirus infections after some countries reported a jump in new cases, although a stronger dollar capped the gains.
Spot gold rose 0.1 per cent to $1,697.67 per ounce by 0304 GMT, after falling for two straight sessions. US gold futures climbed 0.2 per cent to $1,701.80 per ounce.
The new wave of infections is “priced through the fact that markets are looking at negative (US) interest rates,” ANZ analyst Daniel Hynes said, adding that the market was expecting some additional support from the Federal Reserve.
However, “we have (also) had a little bit of a rally in the US dollar which certainly crimps investor appetite.”
The dollar index climbed to a more than two-week high against key rivals on higher safe-haven demand and bond yields, making gold costlier for investors holding other currencies.
The greenback was also boosted by a steepening US yield curve, as Fed officials talked down the prospect of negative rates.
Last week, however, Fed’s policy rate futures traders began pricing in, for the first time ever, a small chance of negative interest rates next year.
Asian shares skidded on growing worries about a second wave of coronavirus infections after the Chinese city where the pandemic originated reported its first new cases since its lockdown was lifted.
Highlighting a strained relationship with China, US President Donald Trump said he was “not interested” in re-negotiating the “Phase 1” trade deal after a Chinese state-run newspaper indicated discontent about it in Beijing.
Globally, an estimated $15 trillion worth of stimulus has already been unleashed to cushion the blow from the coronavirus pandemic.
In a potential gradual return to economic activity, Japan could end a state of emergency in many regions this week if new virus infections are under control.
Meanwhile, SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.05 per cent to 1,081.07 tonnes on Monday.
Among other precious metals, palladium slipped 0.1 per cent to $1,892.52 per ounce and silver fell 0.7 per cent to $15.44, while platinum rose 0.9 per cent to $763.72. – Reuters
