Gold dips as strong US data sparks economic recovery hopes

[BENGALURU] Gold prices fell on Wednesday, from a two-week high hit in the previous session, as an array of strong data from the United States and increased Covid-19 vaccinations lifted hopes of a quick economic recovery, weighing on the metal's safe-haven appeal.

Spot gold was down 0.3 per cent to US$1,737.75 per ounce by 3.54am GMT. US gold futures slipped 0.3 per cent to US$1,738.60 per ounce.

"Gold is being pressured by a little bit of profit taking after a series of strong US data that indicated a quick economic recovery," said Stephen Innes, chief global market strategist at financial services firm Axi.

Bullion prices had jumped on Tuesday to their highest since March 25 at US$1,745.15, as US Treasury yields fell and the dollar slipped to a two-week low against a basket of currencies.

"However, the softening of the yields points towards a situation where central banks around the globe will remain dovish and that will support gold at least in the medium term," Mr Innes said.

In the latest spree of strong economic data, US job openings rose to a two-year high in February while hiring picked up on strengthening domestic demand amid increased Covid-19 vaccinations and additional pandemic aid from the government.

The International Monetary Fund also raised its outlook for global economic growth, forecasting worldwide output would rise 6 per cent this year.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.4 per cent to 1,029.04 tonnes on Tuesday from 1,032.83 tonnes on Monday.

Silver fell 0.4 per cent to US$25.06 and palladium was down 0.4 per cent at US$2,674.30. Platinum rose 0.8 per cent to US$1,242.13.

REUTERS