Gold prices gain as equities' rally hits pause
US gold futures gained 0.6 per cent to $1,714.50.
Gold prices rose on Tuesday as a pullback in equities increased the appeal of the safe-haven metal while investors awaited the US Federal Reserve's two-day monetary policy meeting starting later in the day.
Spot gold was up 0.8 per cent at $1,708.09 per ounce by 0913 GMT, climbing for a second straight session. US gold futures gained 0.6 per cent to $1,714.50.
"Stock markets aren't rising any further or at least not meaningfully and that is taking pressure away from gold," Commerzbank analyst Daniel Briesemann said.
European shares eased as declines in British American Tobacco and banking stocks halted a rally driven by hopes of economic recovery.
"We are seeing a temporary return of risk-off ... gold is gaining strength as liquidity flows back into bullion markets, despite the recovery of the greenback," ActivTrades chief analyst Carlo Alberto De Casa said in a note.
As gold has broken through the resistance level of $1,700, recovery seems likely to continue if there are further declines on stocks, De Casa added.
Gold prices declined last Friday to $1,670.14 an ounce, their weakest level in over a month after an unexpected jump in US employment numbers signalled that an economic recovery was underway.
Traders have stopped pricing in the possibility of negative interest rates in the United States and are now focused on the Fed's monetary policy meeting for any guidance on how the world's biggest economy can recover after the coronavirus.
In other metals, silver dropped 1.5 per cent to $17.60 an ounce, while platinum slipped 0.6 per cent, to $827.98.
Palladium fell 3.1 per cent to $1,959.87 an ounce, and prices of the metal used in autocatalysts are now down more than 30 per cent from a record peak hit in late February.
"The (palladium) market could be more or less balanced due to the very low demand from the automotive industry and that is probably keeping a check on prices," Commerzbank's Briesemann said.
Spot gold was up 0.8 per cent at $1,708.09 per ounce by 0913 GMT, climbing for a second straight session. US gold futures gained 0.6 per cent to $1,714.50.
"Stock markets aren't rising any further or at least not meaningfully and that is taking pressure away from gold," Commerzbank analyst Daniel Briesemann said.
European shares eased as declines in British American Tobacco and banking stocks halted a rally driven by hopes of economic recovery.
"We are seeing a temporary return of risk-off ... gold is gaining strength as liquidity flows back into bullion markets, despite the recovery of the greenback," ActivTrades chief analyst Carlo Alberto De Casa said in a note.
As gold has broken through the resistance level of $1,700, recovery seems likely to continue if there are further declines on stocks, De Casa added.
Gold prices declined last Friday to $1,670.14 an ounce, their weakest level in over a month after an unexpected jump in US employment numbers signalled that an economic recovery was underway.
Traders have stopped pricing in the possibility of negative interest rates in the United States and are now focused on the Fed's monetary policy meeting for any guidance on how the world's biggest economy can recover after the coronavirus.
In other metals, silver dropped 1.5 per cent to $17.60 an ounce, while platinum slipped 0.6 per cent, to $827.98.
Palladium fell 3.1 per cent to $1,959.87 an ounce, and prices of the metal used in autocatalysts are now down more than 30 per cent from a record peak hit in late February.
"The (palladium) market could be more or less balanced due to the very low demand from the automotive industry and that is probably keeping a check on prices," Commerzbank's Briesemann said.