Gold prices ended modestly lower on Monday, reversed as the dollar staged a mini-rebound amid growing concerns over a possible variant of the novel strain of coronavirus that causes COVID-19.
Concerns over increased foreclosure proceedings in London and other parts of the world have led investors to perceived dollar security and forced some traders to momentarily sell some of their bullion holdings, experts said.
Bullion has tended to slide, at least momentarily, as concerns about the virus led to a broader sell-off of risky assets and some drain to cash and precious metals.
“Today’s gold price action reminded traders of the selling panic that occurred in March,” Edward Moya, senior market analyst in Oanda, wrote in a research note Monday. .
Virus concerns have overshadowed the news that Congress has reached agreement on a roughly $ 900 billion coronavirus relief package, which has been seen as part of the short-term bullish thesis for the buying bullion, supporting expectations of increased government spending and a deflated greenback.
Precious metals are seen as a hedge against budget spending that devalues the currency and gold, in particular, has benefited from this idea in recent trading, experts say.
“Congress is about to deliver a second stimulus package today, but this has mostly been assessed for gold,” Moya wrote.
“Gold has appreciated nearly 7% this month and could prolong gains if the bulls are able to maintain control above $ 1900. But that level could prove to be reliable resistance, which means a drop back to $ 1,850 is possible, ”wrote Lukman Otunuga, senior research analyst at FXTM, in a note.
February or GCG21,
fell $ 6.10, or 0.3%, lower to $ 1,882.30 an ounce, retreating from about its highest level since November after the metal posted a weekly gain of 2 , 5% based on the most active contract for the metal.
Gold’s decline on Monday also comes as the US dollar gained ground after a steady decline in the US unit, as measured by the ICE US Dollar DXY index,
The dollar rose 0.2% as investors turned to dollars amid concerns over a potentially faster strain of coronavirus and tightened lockdown measures in Europe.
A stronger dollar can make assets valued in a currency, such as gold, more expensive for buyers of commodities using other currencies.
Delivery March SIH21,
meanwhile, rose 34.6 cents, or 1.3%, to close at $ 26.379 an ounce, after posting a weekly gain of 8.1% on Friday, making its best weekly climb in a month and half, according to FactSet data.
Mars copper HGH21,
lost 5.5 cents, or 1.5%, to $ 3.5775 a pound. The industrial metal posted a weekly gain of around 3% on Friday, extended its climb to a 2013 high and marked a seventh consecutive weekly gain.
Elsewhere on Comex, January platinum PLF21,
paid $ 27 to settle at $ 1,016.10 an ounce, a decrease of 2.5%, while the March palladium PAH21,
fell $ 55.60 to $ 2,316.40 an ounce, down 2.3% for the session.