Gold falls as cash dash overwhelms stimulus measures

Gold prices fell on Monday as investors liquidated their positions in the safe-haven metal despite stimulus measures from global central banks to combat economic damage from the coronavirus outbreak.

FUNDAMENTALS
Spot gold fell 0.7 per cent to $1,487.83 per ounce by 0101 GMT.


The metal rose as much as 3.1 per cent on Friday as a wave of fiscal and monetary stimulus from central banks across the globe halted a run for cash.

US gold futures rose 1 per cent to $1,499.50 per ounce.

Asian markets were set for another turbulent week as more countries all but shut down in the fight against the virus, threatening to overwhelm policymakers' frantic efforts to cushion what is clear to be a deep global recession.

The US Federal Reserve continued to roll out emergency support on Friday as it enhanced efforts with other major central banks to ease a global dollar-funding crunch.

Nearly one in three Americans were under orders on Sunday to stay home to slow the spread of the pandemic as Ohio, Louisiana and Delaware became the latest states to enact broad restrictions, along with the city of Philadelphia.

Airlines cancelled more flights as Australia and New Zealand advised against non-essential domestic travel, the United Arab Emirates (UAE) halted flights for two weeks and Singapore and Taiwan banned foreign transit passengers.

China reported 46 new coronavirus cases on Sunday, the fourth day in a row with an increase in Chinese cases, all but one of which was imported from overseas; while the city of Wuhan, announced it would be loosening a two-month lockdown.

The impact of the pandemic will be "quite severe," but a long expansionary period and high employment rates mean the global economy should weather the current shock, a top International Monetary Fund official said.

Physical demand for gold jumped last week in Singapore as buyers took advantage of a recent slide in prices after investors dumped the metal to raise cash.

Hedge funds and money managers reduced their bullish positions on COMEX gold contracts in the week to March 17, the US Commodity Futures Trading Commission (CFTC) said on Friday.

Palladium fell 1.1 per cent to $1,623.50 per ounce, while platinum rose 1.2 per cent to $618.50.

Silver slipped 0.9 per cent to $12.47 per ounce.