Gold prices slipped on Tuesday as the U.S. dollar strengthened and risk appetite among investors improved on optimism over easing of coronavirus-driven lockdowns by major economies.
Spot gold was down 0.2% to $1,698.92 per ounce at 0924 GMT. U.S. gold futures fell 0.3% to $1,707.50 per ounce.
European stocks rose after a batch of positive corporate earnings reports added to optimism over the curbing of restrictions imposed due to the coronavirus.
Italy and the United States were among a number of countries that tentatively eased lockdowns on Monday to revive their economies.
Further limiting gold’s appeal, the dollar index rose 0.3% against a basket of major currencies.
Market participants were also looking for further clarity on rising China-U.S. tensions after President Donald Trump threatened new tariffs on China for its handling of the outbreak.
The pandemic, which has battered global growth and prompted governments to unleash a wave of fiscal and monetary measures to limit economic damage, has infected more than 3.59 million people globally and killed 250,386.
Gold tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency debasement.
“Gold remains as a safe-haven as currencies are being devalued by massive stimulus programs introduced by central banks and governments around the world to alleviate the worst of the Covid-19 outbreak,” Phillip Futures said in note.
“This has also increased physical demand of gold to hedge against the debasement of fiat currencies thereby triggering a huge demand for gold ingots, bars and coins.”
Indicative of sentiment, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.4% to 1,071.71 tonnes on Monday.
Focus now is on the U.S. ISM non-manufacturing PMI data, due later in the day.
Elsewhere, palladium gained 0.4% to $1,855.39 per ounce, while platinum eased 0.2% to $764.72 and silver shed 0.2% to $14.81.