Gold eases as equity rally boosts risk appetite

[BENGALURU] Gold prices dipped on Wednesday as equity markets rallied on economic optimism and hopes for further stimulus measures boosted risk-on sentiment.

Spot gold was down 0.2 per cent at US$1,722.93 per ounce, as of 1252 GMT.

US gold futures fell 0.3 per cent to US$1,729.70.

Asian equities were set to follow the global equity rally from Tuesday, on hopes of more government stimulus.

On Tuesday, stocks in the US, Europe and emerging markets hit their highest levels since early March.

Traders hope that the European Central Bank will deliver additional stimulus, by around 500 billion euros (S$781.99 billlion), when it meets on Thursday.

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Central banks and governments around the world have unleashed huge quantities of stimulus to cushion their economies from the coronavirus pandemic.

Demonstrations against police brutality continued in the United States, in spite of curfews.

Gold is often seen as an alternative investment during times of political and financial uncertainty.

Capping some losses, the US dollar was down 0.2 per cent and was trading at an over two-month low, making gold cheaper for holders of other currencies.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings, rose 0.1 per cent to 1,129.28 tonnes on Tuesday.

Some sort of coronavirus vaccine could be expected to be available to part of the US population by the end of the year, a senior US Army vaccine researcher said.

Palladium rose 1.4 per cent to US$1,976.30 per ounce, and platinum inched up 0.1 per cent to US$839.52, while silver fell 0.6 per cent to US$17.98.

REUTERS