Gold prices slipped below the key $1,800 level on Tuesday, as the U.S. dollar strengthened, although worries over surging coronavirus cases globally and Sino-U.S. tensions put a floor under bullion prices.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Spot gold was down 0.3% at $1,797.45 per ounce by 0232 GMT. U.S. gold futures fell 0.8% to $1,799.60.

"We are seeing pressure on risk assets given the sentiment and concerns, particularly about China and U.S. relations. We would have expected gold to find more support than currently is," said Michael McCarthy, chief strategist at CMC Markets.

"The reversal of dollar weakness is knocking gold around a little at the moment, particularly given that prices are around 9-year highs."

The dollar index rose 0.1% against its rivals, making gold more expensive for holders of other currencies.

The COVID-19 pandemic will worsen if countries fail to adhere to strict healthcare precautions, the World Health Organization warned on Monday, as coronavirus cases globally passed 13 million.

California`s governor ordered a retreat from the state`s reopening as infections soared, while Canada and the United States are likely to extend bans on non-essential travel imposed to fight the outbreak.

Apart from the pandemic, renewed concerns about diplomatic tension between the United States and China also dented risk appetite, capping losses in bullion, which is considered a hedge against political and financial uncertainty.

Reflecting increased investor interest in gold, holdings of SPDR Gold Trust, the world`s largest gold-backed exchange-traded fund, rose 0.3% to 1,203.97 tonnes on Monday.

Market participants now await release of data on Chinese gross domestic product, retail sales, industrial output, and exports.

Watch Zee Business live TV below:

Elsewhere, palladium slipped 0.4% to $1,971.78 per ounce, while platinum rose 0.3% to $831.05.

Silver dropped 0.5% to $18.98 per ounce, after hitting its highest since September 2019 on Monday.