Gold Slips With Restarts in Focus Before Central Bank Decisions
The precious metal eased after U.S. equities hit the highest in almost 7 weeks.
(Bloomberg) -- Gold slipped for a third day as a drumbeat of moves toward easing lockdown restrictions and reopening economies eroded appetite for haven assets.
Gold is still near its highest in more than seven years amid the health crisis, with investors tracking stimulus from governments and central banks to aid growth. The Federal Reserve and the European Central Bank are expected to make policy announcements on Wednesday and Thursday.
“The gold market is in a wait-and-see mode ahead of the central bank meetings,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. While a weakening dollar is providing some support today, investors are waiting for fresh drivers and, most importantly, a breakout, he said.
Ahead of the meetings, the economy showed further signs of weakness, with U.S. consumer confidence falling to the lowest in six years, roughly in line with estimates. And as virus tests remain in shortage in the U.S., a restart of state economies is still in question.
Gold futures for June delivery fell 0.1% to $1,722.20 an ounce at 1:30 p.m. on the Comex in New York, after sliding as much as 1.1% earlier. Worldwide holdings in bullion-backed exchange-traded funds declined on Monday after 25 days of net inflows, according to data compiled by Bloomberg.
| For more coverage of central banks’ decisions this week: |
|---|
|
“We’ve seen safe-haven demand dry up as equity prices have performed quite well,” Daniel Ghali, a TD Securities analyst, said by phone Tuesday. “At the same time, you have a very strong monetary impulse with concerns about the Fed monetizing the debt, which are really driving investment demand for gold.”
Silver futures also declined on the Comex, while platinum advanced and palladium fell on the New York Mercantile Exchange.
©2020 Bloomberg L.P.