Coronavirus: Gold pressured near $1,700 as lockdown easing erodes investor appetite
Gold remained under pressure near $1,700 an ounce as a drumbeat of moves toward reopening economies eroded appetite for havens and investors counted down to policy announcements from key central banks.
Prices slipped for a third day as governments take steps toward easing lockdown restrictions. Italy, one of the countries hit hardest, is preparing to begin reopening, with similar plans being discussed in Spain and France, although the World Health Organization warned the coronavirus pandemic is far from over.
Gold is still near its highest in more than seven years amid the health crisis. Investors are also tracking the stimulus by governments and central banks to aid growth, with the Federal Reserve and the European Central Bank to make policy announcements on Wednesday and Thursday.
“The gold market is in a wait-and-see mode ahead of the central bank meetings,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. While a weakening dollar is providing some support today, investors are waiting for fresh drivers and, most importantly, a breakout, he said.
Spot gold fell as much as 1.3 percent, sinking below $1,700 an ounce before paring some losses as the dollar eased. It traded down 0.3 percent at $1,708.90 at 12:01 p.m. in London.
Worldwide holdings in bullion-backed exchange-traded funds declined on Monday after 25 days of net inflows, according to data compiled by Bloomberg.
“The risk sentiment continues to improve as more and more economies make plans to gradually reopen businesses,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. “The Fed and ECB are expected to have little market-moving announcements this week. It will be premature to think the worst is over, though, and for that reason I think gold prices may continue to see support.”
In other precious metals, spot silver declined, platinum was little changed, while palladium advanced.