Gold retreats from record peak as dollar firms

Gold hit a record high on Monday as fears over the economic fallout from rising coronavirus cases bolstered its safe-haven appeal, before inching lower as an uptick in the dollar fuelled some profit-taking.

Spot gold had eased 0.2% to $1,971.52 per ounce by 0952 GMT, after hitting a record high of $1,984.66 in early Asian trade. U.S. gold futures were 0.1% higher at $1,988.

“The dollar’s correction from a two-year low is taking some shine off gold,” independent analyst Ross Norman said. “We seem to be in a period of consolidation and we’ve seen some profit-taking.”

However a move to $2,000 is on the cards in the near-term, Norman added, with a host of factors, including weaker economic data and a resurgence in the geopolitical spat between the United States and China, contriving to take gold higher.

Rising COVID-19 cases and simmering U.S.-China tensions have dented hopes for a swift economic recovery, driving inflows into safe-haven assets such as gold, which has climbed about 30% so far this year.

COVID-19 cases have topped 18 million globally, and White House coronavirus experts said on Sunday the U.S. is in a new phase of the outbreak, with infections “extraordinarily widespread” in rural areas as well as cities.

Weighing on bullion, the dollar index was up 0.3% against its rivals, making assets priced in the U.S. unit more expensive for holders of others currencies.

Also on investors’ radars was the new U.S. stimulus plan that lawmakers are struggling to hammer out. White House Chief of Staff Mark Meadows said on Sunday he was not optimistic on a near-term deal for coronavirus relief bill.

Spot gold may retreat into a range between $1,943 and $1,954 per ounce as it failed again to break resistance at $1,982, said Reuters technical analyst Wang Tao.

Elsewhere, silver slipped 0.6% to $24.22 per ounce, platinum inched up 0.1% to $907.51, while palladium rose 1.1% to $2,113.19.

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