July 17, 2020 / 1:17 AM / 19 days ago

PRECIOUS-Gold steadies on rising virus fears, U.S.-China tensions

    July 17 (Reuters) - Gold steadied on Friday after a steep
drop in the previous session, as worries over surging
coronavirus cases and simmering U.S.-China tensions kept the
safe-haven metal underpinned. 
                                
    FUNDAMENTALS    
    * Spot gold        was little changed at $1,797.24 per ounce
by 0045 GMT after falling nearly 1% in the last session. U.S.
gold futures        were mostly unchanged at $1,799.70.
    * The United States reported at least 70,000 new COVID-19
cases on Thursday, a record daily increase for the seventh time
this month, according to a Reuters tally.             
    * New York Fed President John Williams said it could take a
few years for the U.S. economy to recover from the damage caused
by the pandemic, and it was not yet the time to think about
raising interest rates.             
    * On Thursday, fed funds futures [0#FF:], a gauge of where
markets expect the Fed's benchmark overnight lending rate will
be at different intervals, priced in negative rates of about
half a basis point in July 2021.             
    * Gold, which pays no interest, tends to benefit when
interest rates fall as this reduces the opportunity cost of
holding bullion.
    * Markets also kept a wary eye on China's trade relations
with the United States.
    * The Trump administration is considering banning travel to
the United States by all members of the Chinese Communist Party
and their families, a person familiar with the matter said on
Thursday.             
    * Asian markets appear set to open with a firmer tone,
shrugging off an overnight fall in U.S. stocks as the United
States prepares to debate fresh economic stimulus to see the
country through its coronavirus outbreak.            
    * Palladium        dropped 0.8% to $1,981.10 per ounce, 
while platinum        was steady at $824.27 and silver       
rose 0.1% to $19.19.
    
    DATA/EVENTS (GMT)
0900 EU      HICP Final MM, YY        June    
1230 US      Housing Starts Number    June
1400 US      U Mich Sentiment Prelim  July

 (Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu
Sahu)
  
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