(Reuters) - Gold steadied on Thursday as sentiment for riskier assets soured on jitters over a virus outbreak in China, although the safe-haven metal held a tight range as investors awaited further catalysts.
Spot gold was down 0.1% at $1,560.78 per ounce by 10:44 a.m. EST (1544 GMT). U.S. gold futures rose 0.3% to $1,560.50 per ounce.
“Equities are slightly softer so that is stoking some interest in the metal,” said Bob Haberkorn, senior market strategist at RJO Futures. “But absence of any geopolitical risk in the short term is keeping gold prices in check. The European Central Bank meeting did not move the needle too much.”
U.S. stocks opened lower on Thursday on rising worries over the coronavirus outbreak in China that prompted a lockdown of two cities in the country, while a mixed bag of corporate results added to the dour sentiment. [.N]
Traders remained anxious about the spread of the virus as a higher death toll could hurt one of the world’s largest economies, as occurred during an epidemic in 2002-2003.
However, OANDA analyst Jeffrey Halley said the virus fears appear to have been overlooked by the gold market.
“If regional investors were seriously concerned about coronavirus, we would have expected gold to be higher and not lower today,” he said in a note.
Gold, considered a safe store of value in times of political and economic uncertainty, climbed to a near seven-year peak of $1,610.90 on Jan. 8 after an escalation in U.S.-Iran tensions. It has held above $1,550 for the most part ever since.
Lingering geopolitical uncertainties and a low interest environment across the board - reducing the opportunity cost of holding non-yielding bullion - will continue to support gold in the longer term, analysts said.
The European Central Bank kept interest rates unchanged at its latest policy meeting on Thursday and launched a “strategic review” of its inflation goal and tools.
Focus will now shift to the U.S. Federal Reserve’s first meeting of the year scheduled for Jan. 28-29.
Spot gold is biased to revisit its Jan. 21 low of $1,545.96, looking shaky around a resistance at $1,564, said Reuters technical analyst Wang Tao. [TECH/C]
Among other precious metals, palladium fell 2.9% to $2,399.58, silver dipped 0.4% to $17.75 and platinum was also down 1.1% at $1,001.09.
Reporting by Diptendu Lahiri in Bengaluru; Editing by Matthew Lewis
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