Gold prices held steady on Wednesday, supported by concerns stemming from a surge in coronavirus infections in Beijing but with hopes for a potential COVID-19 drug and a stronger U.S. dollar limiting their advance.
Spot gold was flat at $1,727.26 per ounce by 0717 GMT, holding a tight $6 narrow range. U.S. gold futures were mostly unchanged at $1,736.60.
“The attention remains elsewhere, mostly equity markets. However, COVID-19 nerves as Beijing shutdowns extend should offer support on any dips,” said Jeffrey Halley, senior market analyst at OANDA.
Beijing officials reported several new COVID-19 cases for the sixth consecutive day, while new infections hit record highs in six U.S. states on Tuesday.
Offsetting upwards pressure on gold, the dollar rose 0.1% against its rivals, making the metal more expensive for holders of other currencies.
A record increase in U.S. retail sales in May supported views the U.S. recession might be drawing to an end, with upbeat trial results for a COVID-19 treatment further aiding investor sentiment.
Geopolitical tensions and additional stimulus measures from global central banks also offered some support to bullion, which is often used as a safe store of value during times of political and financial uncertainty.
India reported 20 of its soldiers had been killed in clashes with Chinese troops at a disputed border site, while tensions between North and South Korea simmered after North Korea blew up a joint liaison office set up as part of a 2018peace agreement.
“On the one hand, we have geopolitical flashpoints igniting all over the map. On the other, the U.S. dollar is more robust and competing for those same safe-haven flows,” AxiCorp’s chief market strategist Stephen Innes said.
Elsewhere, palladium dropped 0.5% to $1,921.50 per ounce, platinum lost 0.5% to $816.64, while silver was steady at $17.41.