Gold loses ground ahead of eurozone data

Gold eased on Tuesday on expectations of positive manufacturing data from the eurozone, but concerns over a second coronavirus wave kept the safe haven metal near its highest level in more than a month.

Spot gold was down 0.2% at $1,750.75 an ounce by 3.24am GMT after hitting its highest since May 18 at $1,762.84 on Monday. US gold futures eased 0.2% to $1,763.70.

“We’re seeing a little bit of profit taking ahead of the PMI data. Positive data could be a mood shifter and lend more support to the V-shaped recovery,” said Stephen Innes, chief market strategist at financial services firm AxiCorp.

Economists expect the eurozone composite flash PMI to rise to 42.4 in June from 31.9 last month as European economies gradually reopen. US manufacturing data is also due at 1.45pm GMT.

“However, we are going to see more government and central bank stimulus added to the punch bowl just to see the market through this second wave, which should be supportive for gold,” Innes said.

Gold has gained about 15% so far this year, supported mainly by lower interest rates and widespread stimulus measures by global central banks to ease the economic blow from the pandemic, since the non-yielding metal is considered a hedge against inflation and currency debasement.

New infections spiked in Latin America, in Brazil in particular, while New York City, the epicentre of the US outbreak, eased restrictions on Monday after 100 days of lockdown.

Asian shares see-sawed after confusing statements from the White House over the US-China trade deal, with President Donald Trump later clarifying the pact was “fully intact”.

Elsewhere, palladium fell 0.6% to $1,927.57 an ounce, platinum dropped 0.5% to $817.77. Silver slipped 0.6% to $17.72 after hitting a more than one-week high on Monday. — Reuters