Gold slips from 4-week high as dollar, equities firm on coronavirus slowdown

Gold prices eased from a four-week high on Tuesday, as the US dollar and global equities strengthened on signs of a slowdown in coronavirus-related deaths.

FUNDAMENTALS

Spot gold was down 0.2 per cent at $1,657.67 per ounce, as of 0110 GMT, after rising to a four-week high earlier in the session. The metal climbed 2.8 per cent on Monday.

US gold futures rose 1.7 per cent to $1,723.

The dollar was holding close to a near two-week high scaled in the previous session.

Asian markets looked poised on Tuesday to attempt another day of gains after stocks rallied on signs of easing coronavirus deaths, as oil prices resumed their decline on doubts about a potential Saudi-Russian pact to cut output.

Central banks have been turning to quantitative easing (QE), or large-scale purchases of government bonds and other financial assets to pump money into the economy.

The Federal Reserve on Monday moved to bolster a new small-business lending program by allowing banks to turn those loans over to the US central bank for cash, easing concerns among banks about getting stuck holding the low interest loans.

A near total closure of US businesses as authorities try to control the spread of the virus could make US economic data unreliable in the coming months and harder to get a clearer picture of the severity of the recession caused by the virus.

Japanese Prime Minister Shinzo Abe pledged on Monday to roll out an unprecedented economic stimulus package, equal to 20 per cent of economic output, as his government vowed to take "all steps" to battle the deepening fallout from the coronavirus.

The virus is the European Union's biggest ever challenge and member-states must show greater solidarity so that the bloc can emerge stronger from the economic crisis unleashed by the pandemic, German Chancellor Angela Merkel said on Monday.

Meanwhile, India's gold imports plunged more than 73 per cent year-on-year in March to their lowest in 6-1/2 years as record domestic prices and a lockdown to curb the outbreak squeezed retail demand, a government source said on Monday.

SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, said its holdings rose 0.54 per cent to 984.26 tonnes on Monday.

Palladium rose 0.8 per cent to $2,172.53 per ounce, while platinum was steady at $735.26.

Silver edged up 0.1 per cent to $14.99 an ounce, having touched a more than three-week high earlier in the session.