Gold eases on firm dollar, rising virus cases lend support

GOLD - SINGAPORE. Gold prices eased on Wednesday (17/6) on hopes of a potential COVID-19 drug and a stronger U.S. dollar, but the fall was limited due to worries about surging cases of the novel coronavirus in Beijing. 

Spot gold was down 0.2% at US$ 1,723.20 per ounce, holding a tight US$ 6 narrow range. U.S. gold futures fell 0.3% to US$ 1,731.

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"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.

However, the dollar rose 0.1% against its rivals, making gold expensive for holders of other currencies.

Meanwhile, 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.

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Geopolitical tensions and additional stimulus measures from global central banks also offered some support to the safe-haven, which 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 North Korea rejected a South Korea offer to send special envoys and vowed to send back troops to the border.