Gold steadies after sell-off as investors weigh virus risks

New York (August 10th ) Gold steadied on Tuesday, after three straight session of declines, as uncertainties from rising COVID-19 infections countered a buoyant dollar and bets for early tapering of the U.S. Federal Reserve’s economic support.

Spot gold was little changed at $1,729.38 per ounce at 0917 GMT, while U.S. gold futures stood at $1,731.50.

Coronavirus cases in several Asian countries and the United States continued to surge, threatening the economic outlook and pushing some investors to seek safety in gold.

There are enough uncertainties in the market to support gold as part of a diversified portfolio, but “potential buyers are sitting on the fence concerned about the possibility of tapering to start early,” Saxo Bank analyst Ole Hansen said.

“Physical demand out of Asia was also receiving a bit of a knock back due to the increase in coronavirus cases. So a combination of several things just keeps the market on the defensive for now,” Hansen said, adding gold needed to break above $1,750 and $1,760 for a move higher.

Bullion hit its lowest in more than four months on Monday, falling over 4% as robust U.S. jobs figures bolstered expectations the Fed may exit from current pandemic-era stimulus earlier than previously assumed.

A U.S. interest rate increase could reduce the appeal of holding non-yielding gold.

Reuters