Gold prices sank slightly on Wednesday as investors mulled the release of minutes from the U.S. Federal Reserve’s policy meeting, which provided further clues on stimulus measures amid the rapid surge in coronavirus cases.
Spot gold was down 0.2% to $1,646.20 per ounce by 2:02 p.m. EDT, having hit a near one-month high on Tuesday at $1,671.40. U.S. gold futures settled flat at $1,683.60.
“As countries and federal governments stimulate their economies with helicopter money, stimulus programs — it’s a printing press of money supply, which is generally a very favorable environment for gold,” said David Meger, director of metals trading at High Ridge Futures.
Wall Street stocks rose on hopes that the coronavirus outbreak in the United States was nearing its peak and expectations the Congress will push through more aid for the battered economy.
“I think we’re more focused on fiscal stimulus plans as opposed to monetary stimulus plans,” Meger said.
The pandemic has infected more than 1.38 million people across the world and 81,451 have died, according to a Reuters tally.
U.S. President Donald Trump said on Tuesday that the United States might be getting to the top of the “curve” of the coronavirus outbreak and reiterated that he wants to get the U.S. economy reopened soon.
“The U.S. and Europe are hoping the models suggesting the next week will be the worst, regarding new virus infections, are correct, and that the curve will have then peaked for them,” Kitco Metals senior analyst Jim Wyckoff said in a note.
“Technically, the gold bulls have the solid overall near-term technical advantage amid a price uptrend in place … that strongly suggests the path of least resistance for prices will remain sideways to higher for at least the near term and probably longer.”
Market participants are also eyeing Thursday’s meeting of members of the Organization of the Petroleum Exporting Countries and its allies, which could result in further output cuts to shore up oil prices that have tumbled.
Elsewhere, palladium rose 0.8% to $2,087 an ounce, while platinum fell 0.5% to $732. Silver was flat at $14.88 an ounce, having touched a more than three-week high in the previous session.
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