Gold Price Set For Best Quarter In 4 Years As Coronavirus Fears Persist

US gold futures were little changed at $1,780.20 per ounce

Gold prices eased on Tuesday pressured by a strong US dollar, but bullion was still set for its biggest quarterly gain in more than four years as a spike in coronavirus cases cast doubt on a swift global economic recovery. Spot gold edged 0.2 per cent lower to $1,767.96 per ounce by 1239 GMT (6:09 pm in India). US gold futures were little changed at $1,780.20 per ounce.

“Whenever risk aversion kicks in, the dollar comes back in favour and I think that’s acting as a bit of weight around the neck of gold,” said OANDA analyst Craig Erlam.

Against a basket of currencies, the dollar index was up 0.2 per cent, having hit a near one-month high earlier in the day.

But bullion was on track for a third straight monthly rise and a quarterly gain of more than 12 per cent.

The rise in coronavirus cases in the United States along with the ongoing US-China conflict are “all really pointing towards safe haven gold buying”, said Afshin Nabavi, senior vice president at precious metals trader MKS SA.

US states have reversed re-openings and closed businesses to combat a spike in cases, while infections in countries like India and Brazil continued to rise.

Escalating tensions with the US and the European Union, China’s parliament passed landmark national security legislation for Hong Kong on Tuesday.

Casting further doubts over an economic recovery, Federal Reserve Chair Jerome Powell on Monday said the outlook for the world’s biggest economy is “extraordinarily uncertain”.

On the flip side, demand in the physical bullion market, especially in top consumer China, remained weak, Commerzbank said.

China’s net gold imports via Hong Kong in May fell below its exports for a second straight month, as domestic supply remained abundant amid a bleak demand outlook, data showed on Monday.

Elsewhere, platinum steadied at $804.93 per ounce, while palladium fell 0.3 per cent to $1,898.09 per ounce. Silver was little changed at $17.85 per ounce.

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