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Gold eases below US$1,800 as dollar firms, virus fears limit losses
[BENGALURU] Gold prices slipped below the key US$1,800 level on Tuesday, as the US dollar strengthened, although worries over surging coronavirus cases globally and Sino-US tensions put a floor under bullion prices.
Spot gold was down 0.3 per cent at US$1,797.45 per ounce by 2.32am GMT (10.32am SGT). US gold futures fell 0.8 per cent to US$1,799.60.
"We are seeing pressure on risk assets given the sentiment and concerns, particularly about China and US relations. We would have expected gold to find more support than currently is," said Michael McCarthy, chief strategist at CMC Markets.
"The reversal of dollar weakness is knocking gold around a little at the moment, particularly given that prices are around 9-year highs."
The dollar index rose 0.1 per cent against its rivals, making gold more expensive for holders of other currencies.
The Covid-19 pandemic will worsen if countries fail to adhere to strict healthcare precautions, the World Health Organization warned on Monday, as coronavirus cases globally passed 13 million.
California's governor ordered a retreat from the state's reopening as infections soared, while Canada and the United States are likely to extend bans on non-essential travel imposed to fight the outbreak.
Apart from the pandemic, renewed concerns about diplomatic tension between the United States and China also dented risk appetite, capping losses in bullion, which is considered a hedge against political and financial uncertainty.
Reflecting increased investor interest in gold, holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 0.3 per cent to 1,203.97 tonnes on Monday.
Market participants now await release of data on Chinese gross domestic product, retail sales, industrial output, and exports.
Elsewhere, palladium slipped 0.4 per cent to US$1,971.78 per ounce, while platinum rose 0.3 per cent to US$831.05.
Silver dropped 0.5 per cent to US$18.98 per ounce, after hitting its highest since September 2019 on Monday.