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PRECIOUS-Gold dips as coronavirus treatment hopes boost risk appetite

Published 24/08/2020, 01:56 pm
© Reuters.
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* Asian shares rise for second straight day

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)

By Brijesh Patel

Aug 24 (Reuters) - Gold prices fell on Monday as risk sentiment improved after the U.S. drug regulator authorised the use of blood plasma from recovered COVID-19 patients as a treatment option, while the dollar held firm.

Spot gold XAU= was down 0.4% at $1,932.48 per ounce by 0654 GMT after hitting a one-week low of $1,910.99 on Friday. U.S. gold futures GCv1 fell 0.2% to $1,942.60.

"Weighing a little bit on immediate sentiment is virus positive news that has helped stocks and other risk assets go higher today," said Stephen Innes, chief market strategist at financial services firm AxiCorp, adding that gold was in consolidation ahead of Jackson Hole.

Asian stocks extended gains after the U.S. Food & Drug Administration authorised the use of blood plasma from patients who have recovered from COVID-19 as a treatment for the disease. MKTS/GLOB

Investors are now waiting for U.S. Federal Reserve Chairman Jerome Powell's speech at Jackson Hole on Thursday for any hints about how aggressively the central bank will try to manage the long-term recovery from the coronavirus pandemic. U.S. central bank should reiterate its pledge for ultra-low rates, providing some support for gold," Avtar Sandu, a senior commodities manager at Phillip Futures, said in a note.

"The central bank may be expected to signal greater tolerance for above-target inflation keeping real interest rates low."

Lower U.S. interest rates put pressure on the dollar and bond yields, increasing the appeal of non-yielding bullion.

Central banks around the world have rolled out massive stimulus measures to mitigate the economic damage caused by the virus outbreak, which has infected more than 23.31 million people worldwide so far.

The dollar index .DXY , meanwhile, held steady against a basket of major currencies after climbing to a more than one-week high in the previous session. USD/

Silver XAG= dropped 1.6% to $26.26 per ounce, platinum XPT= slipped 0.5% to $913.61 and palladium XPD= fell 1.1% to $2,158.65.

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