Gold retreats from record peak as dollar slide pauses
Gold prices declined from record peaks on profit taking, which lifted the dollar from 2-year lows, ahead of a Federal Reserve meeting and the U.S. fiscal rescue package closure.
Spot gold eased 0.9 percent to $1,922.63 per ounce by 0821 GMT, having hit an all time high of $1,981.35 earlier. U.S. gold futures declined 0.8 percent to $1,916.25.
The dollar rebounded from a 2-year trough on hopes of stimulus extension as U.S. Senate Republicans raced to complete details of a $1 trillion coronavirus aid proposal before enhanced unemployment benefits expire on Friday. The proposal could involve a cut in benefits to $200 from $600, which would boost household incomes and spending, although Democrats urged more support.
The U.S. dollar has been falling almost across the board in recent days on worries about the damage from the coronavirus to the U.S. economy. A new fiscal rescue package is desperately needed given 30 million Americans are out of work and states are tightening social restrictions again.
The prospect of endless stimulus allowed markets to shake off COVID-19 concerns and U.S.-China tensions to make early gains.
The Federal Reserve is expected to reiterate that it will keep rates near zero for years to come when it concludes its two-day policy meeting on Wednesday, but investors speculate about a change in emphasis in the forward guidance.
Moderna Inc’s vaccine against coronavirus could be ready for extensive use by the end of this year, U.S. and company officials said, after the drugmaker announced the start of a 30,000-subject trial.
The number of new infection cases declined 2 percent last week, showing signs of stabilizing in the U.S., however, the unchecked spread of the virus also seem to be denting economic recovery and stalling a rebound in hiring.
Deteriorating U.S.-China ties and dimming hopes of a quick economic recovery as the virus showed no signs of slowing supported the safe-haven metal's appeal.
The greenback against a basket of currencies traded 0.2 percent up at 93.91, having touched a low of 93.48 on Monday, its lowest since June 2018. The U.S. Treasury yields edged higher, with the benchmark 10-year note yield trading at 0.614 percent.
Markets also eye U.S consumer confidence and manufacturing data due later in the day that could give the latest read on progress in the U.S. economic recovery.