Gold steady, firm dollar offsets recession support

Gold prices were steady on Wednesday as a rising dollar offset support for the metal from easing equities and growing concerns of a global recession.

FUNDAMENTALS
Spot gold was unchanged at $1,743.99 per ounce by 0030 GMT, having gained 0.7% in the previous session on recession fears. US gold futures rose 0.2% to $1,748.50.


The dollar gained about 0.2% against key rivals, making gold costlier for investors using other currencies, while Asian equities were likely to come under pressure.

The US economy should bounce back sharply in the third quarter after its deep coronavirus-related collapse, but it will not fully recover its lost ground until sometime after next year, the non-partisan Congressional Budget Office said.

US homebuilding dropped by the most on record in April and permits for future construction tumbled, underlining fears that the coronavirus crisis would lead to the deepest economic contraction in the second quarter since the Great Depression.

Gold is seen as an alternative asset during times of economic and political uncertainties.

The slump in Japanese business confidence deepened in May, hitting decade lows as firms braced for a protracted period of coronavirus-driven economic weakness, the Reuters Tankan survey showed.

The global palladium market will see its smallest deficit since at least 2012 this year, while the platinum market remains significantly oversupplied, an industry report said.

Palladium fell 1.4% to $2,029.50 per ounce and silver eased 0.1% to $17.38, while platinum gained 0.4% to $836.01.