🤑 It doesn’t get more affordable. Grab this 60% OFF Black Friday offer before it disappears…CLAIM SALE

PRECIOUS-Gold retreats as China seeks to limit virus damage

Published 02/03/2020, 09:30 PM
© Reuters.  PRECIOUS-Gold retreats as China seeks to limit virus damage
XAU/USD
-
XAG/USD
-
GC
-
SI
-
XPT/USD
-
XPD/USD
-

(Updates prices)
* Dollar rebounds from a 2-week low
* China coronavirus death toll rises
* Gold specs cut bullish positions in week to Jan. 28 - CFTC

By K. Sathya Narayanan
Feb 3 (Reuters) - Gold fell 1% on Monday, retreating from
its highest level in nearly four weeks as China's steps to
protect its economy from the impact of the coronavirus outbreak
and a buoyant dollar stemmed some inflows into safe-haven
assets.
Spot gold XAU= fell as much as 1% and was down 0.8% at
$1,577.11 per ounce as of 1321 GMT.
Prices touched the highest since Jan. 8 earlier in the
session. U.S. gold futures GCcv1 shed 0.4% to $1,581.70.
China's central bank unexpectedly lowered the interest rates
on reverse repurchase agreements and injected 1.2 trillion yuan
($171 billion) of liquidity into markets as authorities sought
to relieve pressure on the economy from the rapidly spreading
virus. "Uncertainty is generally supportive for gold but we have
also seen China taking measures to support the economy. This is
something financial markets are taking positively," said Julius
Baer analyst Carsten Menke, adding that a rebound in the dollar
was adding to gold's weakness.
European and U.S. shares were a little higher, but a gauge
of global stocks hovered near seven-week lows. The U.S. dollar
was up about 0.3% against its main rivals, having recovered from
a two-week low touched in the previous session.
MKTS/GLOB USD/
"Once we get through this 'band-aid effect', the reality
will set in that there is an economic tumult about to happen in
China, which is going to spread globally and force a lot of
central banks to cut rates," said Stephen Innes, chief market
strategist at AxiCorp.
Lower interest rates reduce the opportunity cost of holding
the non-yielding bullion.
Physical gold markets in major Asian hubs saw activity
dwindle last week as the epidemic took a toll on demand,
especially with top consumer China out of action. GOL/AS
People's anxiety about going out because of the outbreak
during the Lunar New Year holidays in China, usually a strong
seasonal driver for bullion demand, will have a negative impact
on the gold market, said Julius Baer's Menke.
Speculators cut their bullish positions in COMEX gold
contracts in the week to Jan. 28, data showed on Friday. CFTC/
Elsewhere, palladium XPD= was up 0.6% at $2,290.92 an
ounce, silver XAG= fell 1.5% to $17.76, while platinum XPT=
fell 0.1% to $955.57.
($1 = 7.0155 Chinese yuan renminbi)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.