· Gold fell more than 1% on Tuesday, retreating from last session's jump above the key $1,700 level, as hopes for global stimulus measures to cushion the economic impact of the coronavirus outbreak lifted riskier assets and the dollar.
Spot gold declined 1.4% to $1,656.24 per ounce by 0530 GMT, having touched its highest since December 2012 at $1,702.56 on Monday on concerns over the global spread of the virus. U.S. gold futures fell 1.1% to $1,657.10.
· "Markets are getting a little bit edgy. Risk is turning on due to the fiscal policy measures out of the United States and Japan, which is negative for gold over the short term," said Stephen Innes, chief market strategist at AxiCorp.
· U.S. President Donald Trump said he would take "major" steps to gird the economy against the impact.
· Japan's economy minister said his government would not hesitate to take necessary and adequate steps to offset significant effects on the domestic economy from the global spread of the virus.
A Japanese finance ministry official said it was in contact with the Trump administration, which is putting together an economic package.
· "This is just the beginning of the so-called domino effect and I would expect the rest of Asian governments to follow in lock steps with similar packages," Innes said.
· Asian shares and U.S. dollar bounced, while bond yields rose from historic lows.
· The safe-haven yen retreated from a more than three-year high touched on Monday.
· The significant fiscal response of the United States might alleviate investor concerns about the economic growth outlook, which is negative for bullion, said Michael McCarthy, chief strategist at CMC Markets.
· The U.S. Federal Reserve delivered emergency interest rates cut last week to shield the world's largest economy from the virus impact. The markets expect another cut at the Fed's March 18 policy meeting.
· Italy ordered citizens not to move around the country except for work and emergencies, while banning all public gatherings.
· Total global infections touched 111,600 by Monday, including 80,754 in mainland China.
· Elsewhere, holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose to 30.99 million ounces, its highest since October 2016.
· Palladium rose 0.5% to $2,502.99 per ounce, having touched a near one-month low in the previous session. Silver gained 0.2% to $17.01, while platinum rose 1.5% to $875.24.
· Gold Price Analysis: Monday's spinning top suggests buyer exhaustion
Gold printed a seven-year high of $1,703 on Monday but closed the day with a spinning top candle, signaling buyer indecision in the market.
A bearish reversal would be confirmed if prices close Tuesday under $1,657 (Monday's low), validating the spinning top candle and the bearish divergence of the 14-day relative strength index.
A bearish close would open the doors for a pullback to key average support near $1,640. A violation there would expose the psychological support at $1,600 (10-week average).
On the higher side, a close above the spinning top's high of $1,703 would indicate a continuation of the uptrend. At press time, the yellow metal is trading at $1,670 per Oz, representing a 0.4% drop on the day.
Reference: Reuters,FXStreet
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