(Reuters) - Gold prices edged lower on Tuesday, as the U.S. dollar strengthened, although worries over surging coronavirus cases globally and Sino-U.S. tensions put a floor under bullion prices.
Spot gold was down 0.1% at $1,801.11 per ounce by 0647 GMT. U.S. gold futures fell 0.6% to $1,804.
“We are seeing pressure on risk assets given the sentiment and concerns, particularly about China and U.S. relations. But the reversal of dollar weakness is knocking gold around a little at the moment, particularly given that prices are around 9-year highs,” said Michael McCarthy, chief strategist at CMC Markets.
The dollar index rose 0.1% against its rivals, making gold more expensive for holders of other currencies.
The COVID-19 pandemic will worsen if countries fail to adhere to strict healthcare precautions, the World Health Organization warned on Monday, as coronavirus cases globally passed 13 million.
California’s governor ordered a retreat from the state’s reopening as infections soared, while Canada and the United States are likely to extend bans on non-essential travel imposed to fight the outbreak.
Apart from the pandemic, renewed concerns about diplomatic tension between the United States and China also dented risk appetite, capping losses in bullion, which is considered a hedge against political and financial uncertainty.
Reflecting increased investor interest in gold, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.3% to 1,203.97 tonnes on Monday.
On the technical front, a bullish target of $1,831 per ounce has been aborted for spot gold as it is about to break a support at $1,796, said Reuters technical analyst Wang Tao.
Elsewhere, palladium gained 0.4% to $1,988 per ounce and platinum rose 0.9% to $835.43.
Silver dropped 0.3% to $19.02 per ounce, after hitting its highest since September 2019 on Monday.
Reporting by Brijesh Patel in Bengaluru; Editing by Shailesh Kuber