(Reuters) - Gold dropped off a more than one-week high on Friday as hopes for global measures to counter the coronavirus outbreak increased appetite for equities, though the metal remained on track for a weekly gain.
Spot gold was down 0.1% at $1,575.31 an ounce at 0846 GMT, having touched its highest since Feb. 4 at $1,577.89.
U.S. gold futures were flat at $1,579.
“Equities markets have shrugged off the bearish sentiment and started to move higher as investors reassess the potential (economic) impact of the virus,” said CMC Markets analyst Margaret Yang Yan, adding that bullion is also being pressured by a strong dollar.
Asian shares were poised for a second straight week of gains and the dollar rose to a more than four-month high against a basket of major currencies. [MKTS/GLOB] [USD/]
However, analysts said that interest in gold remains undimmed as the death toll in China’s Hubei province continues to rise.
Bullion has gained about 0.3% this week.
Investors will also be watching for U.S. retail sales and consumer confidence numbers due later in the day.
“The U.S. consumer is really the biggest piece of global growth at this point,” said DailyFx currency strategist Ilya Spivak, pointing to a sluggish Europe as well as China’s health crisis and trade war with the United States.
U.S. prosecutors on Thursday accused Chinese company Huawei of stealing trade secrets. Washington had placed the telecoms equipment maker on a trade blacklist last year.
The latest accusations come as the two countries pursue a Phase 2 trade agreement after signing a Phase 1 deal in an apparent thaw in relations after a prolonged trade dispute.
“Given it is an election year in the U.S., the consensus in the gold market is that the Chinese would do anything to make sure they don’t cause any further disruption to their economy, at a time when it is pretty vulnerable,” said IG Markets analyst Kyle Rodda.
In other precious metals, palladium rose 0.6% to $2,438.71 an ounce, set for its strongest week in a month.
Silver gained 0.3% to $17.69, while platinum was up 0.3% at $970.60.
Reporting by K. Sathya Narayanan in Bengaluru; Editing by Bernard Orr and David Goodman