Gold steady as virus cases rise, stronger US dollar limits upside

[BENGALURU] Gold was steady on Thursday as investors remained concerned about a possible slow down in global economic recovery due to a rise in new coronavirus cases in the United States and China, but a strengthening US dollar limited the metal's appeal.

Spot gold was flat at US$1,726.69 per ounce, as of 0053 GMT.

US gold futures were steady at US$1,736 per ounce.

Beijing cancelled scores of flights, shut schools and blocked off some neighbourhoods as it ramped up efforts to contain a coronavirus outbreak. The city confirmed 21 new Covid-19 cases as of June 17.

Just days before US President Donald Trump's campaign rally in Tulsa, new coronavirus cases are surging in Oklahoma, Texas, Arizona and elsewhere.

Spiking coronavirus cases and prospects of new lockdowns erased dented investors sentiment towards riskier assets.

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However, a rise in the US dollar limited gold's advance as the dollar index held firm against its rivals.

Meanwhile, Bank of England is expected to announce an increase of at least £100 billion pounds (S$175 billion) in its bond-buying programme at its meeting due 1100 GMT.

The US economy is beginning to recover from the worst of the coronavirus crisis, but with some 25 million Americans displaced from work and the pandemic ongoing, it will need more help, Federal Reserve Chair Jerome Powell told lawmakers on Wednesday.

Gold tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency debasement.

Palladium gained 1.3 per cent to US$1,946.73 per ounce, while silver dropped 0.8 per cent to US$17.45, and platinum lost 0.7 per cent to US$813.26.

REUTERS