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Gold backtracks from $1,700 top on profit-taking

· Gold retreated from the $1,700 level touched briefly earlier on Monday, as investors sold the bullion to cover margin calls amid plummeting equity and energy markets, overshadowing the metal's safe-haven demand.

· Spot gold was down 0.1% at $1,672.32 per ounce by 1:54 p.m. EDT (1754 GMT), while U.S. gold futures settled up 0.2% at 1,675.70.

· Gold had been up as much as 1.7% in a volatile session, having touched its highest since December 2012 at $1,702.56 earlier. However, the price rally has led to profit taking in the metal, analysts said.

· "It's a little bit surprising with gold not having done better - we did hit the $1,700 mark in early trading but it has come down and it seems to be a sale across all assets," said Mitsubishi analyst Jonathan Butler.

"The (decline) may be partly because of margin calls being made in other commodities or asset classes, which means liquidation in gold."

· Wall Street's main stock indexes plummeted about 5% as a slump in oil prices and the rapid spread of the coronavirus amplified fears of a global recession.

· Oil prices dived by a third, its biggest daily rout since the 1991 Gulf War, as Saudi Arabia and Russia indicated they would increase supply to an oversupplied market. Gold is often viewed as a hedge against oil-led inflation.

· "We have this two-way battle going on between leveraged hedge funds, who need to reduce again, and investors trying to find some safe haven away from falling stock markets, especially the energy sector," said Saxo Bank analyst Ole Hansen.

· On Sunday, Italy put much of its north under virtual lockdown to contain the virus outbreak.

· More than 111,600 people have been infected by the coronavirus across the world and over 3,800 have died, according to a Reuters tally of government announcements.

· Investor focus next turns to the European Central Bank meeting due on Thursday and the U.S. Federal Reserve's policy meeting on March 18.

· In other precious metals, palladium fell 2.9% to $2,491.15 an ounce, having earlier dipped to its lowest since Feb. 12 at $2,352.

Autocatalyst metal palladium, meanwhile, slid as much as 8% in early trade amid wider risk-off sentiment.

· "Expectations of industrial demand across metals are being re-evaluated in light of the coronavirus and that is affecting palladium, (whose) biggest single market is China," Mitsubishi's Butler said.

· Silver fell 1.9% to $16.98 an ounce, while platinum was down 4.3% at $861.74.

Reference: Reuters