Gold prices retreated from a record high on Monday after investors booked some profits and the dollar rose, although concerns over rising coronavirus cases and its impact on global economy limited bullion’s losses.
Spot gold fell 0.4 per cent to $1,967.87 per ounce at 10:13 am EDT (1413 GMT), having earlier hit a record high of $1,984.66. US gold futures were down 0.5 per cent at $1,975.40.
“Over the past two weeks we’ve had such a climb in gold, it’s going up so fast that you’re going to see people wanting to digest or take some profits,” said Michael Matousek, head trader at US Global Investors, adding that a rising dollar was also weighing on prices.
Bullion has surged about 30 per cent so far this year, supported mainly by lower interest rates and widespread stimulus measures by global central banks to ease the economic blow from the pandemic.
The US dollar was up 0.5 per cent against rivals, making assets priced in the US unit more expensive for holders of other currencies, while US stocks also gained.
Investors’ were also keeping a close eye on the new US stimulus plan that lawmakers are struggling to hammer out.
“We see a lot of people anticipating once that (stimulus) comes out, more bids will come into gold,” Matousek said.
Virus cases have topped 18 million globally, with major cities announcing fresh restrictions to curb infections.
“There’s no doubt that the backdrop remains highly constructive, with negative real yields for the foreseeable future. We’ve subsequently revised up our 6–12 month target to $2,300 per ounce,” ANZ analysts wrote in a note dated Friday.
“Even so, we’re mindful that if economic sentiment improves in coming quarters, the hurdle for continued growth in investor demand may make the path to this level an arduous one.”
Elsewhere, silver eased 0.6 per cent to $24.21 per ounce, platinum rose 0.7 per cent to $913.48, and palladium was unchanged at $2,090.90.