· Gold prices eased on Tuesday from a one-month high as the U.S. dollar gained strength on signs of a slowdown in fresh coronavirus cases, but concerns over the economic fallout from the pandemic provided a floor to bullion.
Spot gold was down 0.2% to $1,658.10 per ounce, as of 0353 GMT, after rising to a one-month high of $1,671.40 earlier in the session. The metal rose as much as 2.8% on Monday.
· A pullback was expected, said Michael McCarthy, chief strategist at CMC Markets, adding that the dollar's strength was also pressuring gold.
"But it's pretty clear that the trend in the short term is upward. A lift in equities is not weighing on gold because it rallied overnight alongside equities ... there appears to be a serious breakdown in the inverse correlation between gold and growth assets."
· The dollar held close to a near two-week high, while Asian shares followed gains in U.S. stock markets on signs of easing coronavirus deaths.
· New York Governor Andrew Cuomo said on Monday that hospitalizations of coronavirus patients were down and the rate of the rise in deaths has leveled off in the hardest-hit state. But he cautioned against complacency.
· The United States is bracing for its toughest week yet as the death toll climbs above 10,000 while across the Atlantic, British Prime Minister Boris Johnson has entered intensive care after his COVID-19 symptoms worsened.
· Supporting bullion were reports that Japan's Prime Minister Shinzo Abe was set to announce a state of emergency for the capital, Tokyo, and six other prefectures.
· A low-interest environment and higher economic concerns could see gold break though the $1,700 level in the coming weeks and months, CMC's McCarthy said.
In a bid to pump money into economies hammered by the outbreak, central banks have been turning to quantitative easing, or large-scale purchases of government bonds and other financial assets.
U.S. gold futures rose 1% to $1,710.40, extending a lead over London spot prices, signalling market worries that refinery closures and logistics constraints could hamper bullion shipments to the United States to meet contract requirements.
· The increase came despite measures from the CME Group's Comex Exchange to ease supply concerns and assurances from the London Bullion Market Association.
· Palladium fell 0.6% to $2,142.72 per ounce, while platinum shed 0.3% to $733.20.
· Silver advanced 1.3% to $15.18 an ounce, having earlier touched a more than three-week high.
· Gold Price Analysis: Refreshes four-week high, $1,685 on bulls’ radar
Gold prices remain on the front foot while taking the bids near $1,668, up 0.70%, amid the Asian session on Tuesday. In doing so, the bullion refreshes the four-week high with an intraday peak of $1,674.15 while also marking a fifth consecutive daily gain.
While the yellow metal’s sustained trading beyond March 26 top suggests its further upside, an ascending trend line since March 13, 2020, seems to be the immediate resistance to watch.
Should the safe-haven manage to cross $1,685, the previous month high surrounding $1,703 will be on the buyers’ target list during the further advances.
On the downside, the metal’s declines below March 26 high around $1,645 can drag the quote to a short-term rising support line around $1,624.
However, a downside break of $1,624 will confirm the bearish technical pattern that will get validation from the 21-day SMA level of $1,586.
Reference: CNBC, FXStreet
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