Gold eases as stronger dollar offsets U.S. stimulus aid boost
· Gold prices fell on Tuesday, as support from the U.S. Congress passing a long-awaited near $900 billion coronavirus aid was countered by a stronger dollar, while some profit-taking also weighed on sentiment.
· Spot gold fell 0.3% to $1,870.69 per ounce by 0702 GMT. U.S. gold futures dropped 0.3% to $1,876.90.
· There was some profit-booking after the United States passed the stimulus bill and the dollar edged up, said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai.
· In the near term, gold can correct to $1,850-$1,860 levels as all the positive news are priced in by the market, he added.
· The U.S. Congress on Monday approved an $892 billion coronavirus aid to support the pandemic-ravaged economy, with President Donald Trump expected to sign the package into a law soon.
· Pressuring gold, the dollar firmed as a new coronavirus strain in the UK that prompted a lockdown and caused several countries to shut their borders to Britain, clouded the global economic recovery outlook and pushed Asian shares lower.
· Gold has climbed over 23% this year, mainly driven by a raft of pandemic stimulus measures that stoked fears of inflation.
· The precious metal is often used as a hedge against inflation.
· Though inflation is yet to materialize, the large amount of low-yielding bonds underscores non-yielding gold’s status as a safe-haven asset, said Hitesh Jain, lead analyst at Mumbai-based Yes Securities.
· Gold should trade in a $1,850-$1,930 range in the near-term, underpinned by pandemic developments, he added.
· On the technical front, gold may drop to $1,862 per ounce again, according to Reuters analyst Wang Tao.
· Silver slipped 1.6% to $25.74 an ounce. Platinum dropped 2% to $989.27 6, while palladium rose 0.1% to $2,310.75.
Reference: CNBC
Thai
Eng