(Reuters) – Gold prices fell on Tuesday, hurt by a stronger dollar that countered support from the U.S. Congress passing a long-awaited COVID-19 stimulus bill, while some profit-taking added further pressure.
Spot gold fell 0.3% to $1,871.04 per ounce by 0819 GMT, U.S. gold futures dropped 0.5% to $1,873.60 per ounce.
There was some profit-booking after the United States passed the stimulus bill and the dollar edged up, said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai.
In the near term, gold can correct to $1,850-$1,860 levels as all the positive news are priced in by the market, he added.
The U.S. Congress on Monday approved a $892 billion coronavirus aid to support the pandemic-ravaged economy, with President Donald Trump expected to sign the package into a law soon.
Pressuring gold, the dollar firmed as a new coronavirus strain in Britain that prompted a lockdown and caused several countries to shut their borders to Britain, clouded the global economic recovery outlook and pushed Asian shares lower.
Gold has climbed over 23% this year, mainly driven by a raft of pandemic stimulus measures that stoked fears of inflation. The precious metal is often used as a hedge against inflation.
Though inflation has yet to materialise, the large amount of low-yielding bonds underscores non-yielding gold’s status as a safe-haven asset, said Hitesh Jain, lead analyst at Mumbai-based Yes Securities.
Gold should trade in a $1,850-$1,930 range in the near-term, underpinned by pandemic developments, he added.
On the technical front, gold may revisit its Nov. 30 low of $1,764.29 per ounce next quarter, according to Reuters analyst Wang Tao.
Silver fell 1.3% to $25.82 an ounce. Platinum slipped 1.6% to $993.50, while palladium rose 0.4% to $2,316.48.
Reporting by Nakul Iyer and Sumita Layek in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich