Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

PRECIOUS-Gold falls on profit-booking, virus-led economic fears cap losses

Published 13/04/2020, 01:07 pm
© Reuters.
XAU/USD
-
XAG/USD
-
GC
-
SI
-
PA
-
PL
-
GLD
-

(Adds analyst comments and updates prices)

* Commodity currencies slip against the dollar, yen

* 16.8 mln U.S. jobless claims since week ended March 21

* Interactive graphic tracking the global spread: open https://tmsnrt.rs/3aIRuz7 in an external browser

By K. Sathya Narayanan

April 13 (Reuters) - Gold fell on Monday as investors booked profits after prices hit a one-month high last week, while worries over a coronavirus-driven steeper global economic downturn and the U.S. Federal Reserve's stimulus measures limited bullion's losses.

Spot gold XAU= slipped 0.4% to $1,682.65 per ounce by 0522 GMT, having risen to its highest since March 9 on Friday. U.S. gold futures GCcv1 fell 1.1% to $1,732.90.

"We're seeing a little bit of reversal of Friday night's move, which was driven by the Fed's latest policy action. A little bit of profit-taking is kicking in," IG Markets analyst Kyle Rodda said, adding that gold faced a stiff technical resistance around the $1,690 level.

"But broadly speaking, gold is remaining very well supported."

In a bid to keep the economy afloat amid the outbreak, which had forced 16.8 million Americans to file for unemployment benefits since the week ended March 21, the Fed on Thursday announced a broad, $2.3 trillion stimulus package. Fed stimulus is a magnet for gold. Not only does it improve the opportunity cost for holding gold but at some stage it will eventually water down the dollar," said Stephen Innes, chief market strategist at financial services firm AxiCorp.

European Union finance ministers also agreed on half-a-trillion euros worth of economic support but left open the question of how to finance recovery in the bloc headed for a steep recession. currencies slipped against safe-haven units such as the dollar and yen as a record output cut agreed by major oil producing nations failed to offset broader concerns about global demand for resources, while world shares fell as investors braced for more economic damages from the coronavirus pandemic. USD/ MKTS/GLOB

Meanwhile, major physical bullion hubs saw activity dwindle last week due to coronavirus-led restrictions, with strained supply chains cut off from soaring safe-haven demand in some regions. GOL/AS

Reflecting appetite for bullion, holdings in SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, rose 0.6% to 994.19 tonnes on Thursday. GOL/ETF

Palladium XPD= rose 3.4% to $2,245.48 per ounce, while platinum XPT= slipped 0.9% to $741.60 and silver XAG= fell 0.5% to $15.24.

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.