Autocatalyst metals platinum and palladium rose more than 5% each in early trade before paring gains. The metals were the worst hit in Monday’s free fall since they are also considered industrial metals.
MUMBAI – Gold prices fell almost 2% on Tuesday, extending losses from the previous session’s meltdown, as investors continued to sell assets to keep their money in cash because of heightened concerns over the economic toll of the coronavirus outbreak.
Autocatalyst metals platinum and palladium rose more than 5% each in early trade before paring gains. The metals were the worst hit in Monday’s free fall since they are also considered industrial metals.
Spot gold fell 1.8% to $1,487.36 per ounce by 0757 GMT, having slumped as much as 5.1% on Monday to its lowest since November 2019. U.S. gold futures gained 0.1% to $1,488.
“This is just a continuing trend of gold positions being liquidated as equity markets collapse. There is a trend towards holding cash in the market and that’s being reflected in gold,” said Jeffrey Halley, a senior market analyst at OANDA.
“With the meltdown in asset markets, it’s clear that longer-term gold, silver and palladium holders are liquidating profitable positions to cover losses elsewhere.”
Asian shares held their ground on Tuesday in volatile trade following one of Wall Street’s biggest one-day routs in history as headlines about the outbreak and its global economic impact whiplashed investor sentiment.
Countries and major central banks have ramped up measures to protect their economies from the outbreak, which has infected more than 174,100 people globally.
The U.S. Federal Reserve slashed rates back to near zero in a surprise move on Sunday, to support a rapidly deteriorating global economy.
With a lot of risks in the market, which should have been supportive for bullion, the Fed hit the panic button, signalling concerns over the economic recovery, said Stephen Innes, chief market strategist at AxiCorp.
“But we have to weigh it with the fact that equities are probably going to fall further as the economic damage is going to come out worse than expected. So, bad news and good news is both bad for gold right now,” he said.
Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.2% to 929.84 tonnes on Monday.
Among other precious metals, palladium was down 0.5% at $1,609.09 per ounce, having plummeted as much as 18% in the previous session.
Platinum slid 0.3%, to $661, having posted its biggest one-day percentage decline ever on Monday.
Silver fell 1.2% to $12.75, after touching its lowest since 2009 in the last session.
