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Gold eyes best quarter in four years as virus fears persist

Published 2020-06-30, 06:44 a/m
© Reuters.
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* Gold on track for third straight monthly gain

* U.S dollar holds near 1-month high

* Fed Chair says U.S. economic outlook "extraordinarily uncertain"

By Nakul Iyer

June 30 (Reuters) - Gold prices eased on Tuesday pressured by a strong U.S. dollar, but bullion was still set for its biggest quarterly gain in more than four years as a spike in coronavirus cases cast doubt on a swift global economic recovery.

Spot gold XAU= edged 0.2% lower to $1,767.96 per ounce by 1239 GMT. U.S. gold futures GCv1 were little changed at $1,780.20 per ounce.

"Whenever risk aversion kicks in, the dollar comes back in favour and I think that's acting as a bit of weight around the neck of gold," said OANDA analyst Craig Erlam.

Against a basket of currencies, the dollar index was up 0.2% having hit a near one-month high earlier in the day. USD/

But bullion was on track for a third straight monthly rise and a quarterly gain of more than 12%.

The rise in coronavirus cases in the United States along with the ongoing U.S.-China conflict are "all really pointing towards safe haven gold buying," said Afshin Nabavi, senior vice president at precious metals trader MKS SA.

U.S. states have reversed re-openings and closed businesses to combat a spike in cases, while infections in countries like India and Brazil continued to rise. tensions with the U.S. and the European Union, China's parliament passed landmark national security legislation for Hong Kong on Tuesday. further doubts over an economic recovery, U.S. Federal Reserve Chair Jerome Powell on Monday said the outlook for the world's biggest economy is "extraordinarily uncertain". the flip side, demand in the physical bullion market, especially in top consumer China, remained weak, Commerzbank (DE:CBKG) said. GOL/AS

China's net gold imports via Hong Kong in May fell below its exports for a second straight month, as domestic supply remained abundant amid a bleak demand outlook, data showed on Monday. platinum XPT= steadied at $804.93 per ounce, while palladium XPD= fell 0.3% to $1,898.09 per ounce. Silver XAG= was little changed at $17.85 per ounce.

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