Gold prices ease on buoyant equities, strong dollar

Gold prices edged lower on Thursday, after a sharp rise in the previous session, as equities regained some footing and the dollar firmed, although hopes for more global economic stimulus measures underpinned bullion.

FUNDAMENTALS
Spot gold eased 0.2% to $1,710.23 per ounce by 0034 GMT, having risen as much as 1.9% in the previous session. U.S. gold futures slipped 0.2% to $1,735.30.


Asian equity markets were poised to edge higher on Thursday after rebounding crude prices and the promise of more U.S. government aid to prop up the coronavirus-hit economy helped calm global equity markets.

Against key rivals, the U.S. dollar rose to a more-than two-week high, making gold costlier for investors using other currencies.

The U.S. House of Representatives expects to pass a nearly $500 billion coronavirus relief bill on Thursday but will put off any decision on changing its voting rules during the pandemic, avoiding a potential partisan fight.

It may take European Union countries until the summer or even longer to agree on how exactly to finance aid to help economies recover from the coronavirus pandemic as major disagreements persist, a bloc official said on Wednesday.

Gold tends to benefit from widespread stimulus measures as it is often seen as a hedge against inflation and currency debasement.

The European Central Bank said on Wednesday it would let banks post collateral that was downgraded to junk during the coronavirus outbreak to prevent a credit squeeze in the euro zone.

Britain's government plans to test a sample of 20,000 English households for COVID-19 in the coming weeks to try to establish how far the disease has spread across the country.

SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, holdings rose 0.9% to 1,042.46 tonnes on Wednesday.

Palladium gained 0.3% to $1,944.56 per ounce, while platinum declined 0.9% to $750.69 and silver fell 0.9% to $15.02.