Gold holds above $1,600 on fears over economic impact of virus
Autocatalyst metal palladium, meanwhile, scaled yet another record peak on a sustained supply shortfall
Gold prices held steady above the key $1,600 mark on Wednesday as an uptick in equities due to a drop in new virus cases was kept in check by fears about the economic fallout of the epidemic.
Autocatalyst metal palladium, meanwhile, scaled yet another record peak on a sustained supply shortfall.
Spot gold was little changed at $1,601.77 per ounce by 0244 GMT. In the previous session, bullion prices surged 1.3% to their highest since January 8 at $1,605.10.
US gold futures were up 0.1% to $1,604.80.
Asian shares and US stock futures edged cautiously higher as investors tried to shake off worries about the epidemic.
"The big wave of risk-off has sort of dissipated right now, but still the economic fallout is buttressing the demand for gold," Stephen Innes, chief market strategist at AxiCorp.
The increase in the number of new virus cases slowed in China's Hubei province even as the death toll rose by 132 as of Tuesday.
The US dollar, also considered a safe-haven, hovered close to a more than four-month high against key rivals.
"The stronger dollar is not really curbing the inflows to gold ... from an inflation perspective, a stronger US dollar is working against the US Federal Reserve's inflation target and is pointing towards lower interest rates," Innes said.
Investors await the minutes of the Federal Reserve's Jan. 28-29 policy meeting, due at 1900 GMT.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion and also weigh on the US currency.
Indicative of investor sentiment, holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.6% to 929.84 tonnes on Tuesday, their highest since Nov. 11, 2016.
"The short-term dynamics are very difficult to tell simply because the market is in a position where it is considerably over-bought and if we get (any) positive news it could possibly trigger a downside move (in gold)," Innes said.
Deficit-hit palladium soared 4.1% to $2,743.31 an ounce, having scaled a record high of $2,757.50 earlier in the session.
Plagued by sustained supply deficit, palladium, used mainly in catalytic converters in vehicles, rose about 54% in 2019.
Silver was up 0.4% to $18.24, having earlier touched a three-week peak at $18.26.
Platinum also hit its highest in three weeks earlier in the session, at $1,001.67, and was up 0.8% to $1,000.02 as of 0244 GMT.
