By Barani Krishnan
Investing.com – Gold snapped a four-day rally on Tuesday as investors returned to give life to stocks and other risk assets crushed in the aftermath of the coronavirus crisis.
But the yellow metal’s retreat was, nevertheless, modest as markets awaited the outcome of the Federal Reserve’s monthly policy meeting and what that could mean for U.S. rates.
Gold futures for February delivery on New York’s COMEX settled down $7.60, or 0.5%, at $1,569.80 per ounce. It reached a three-week high of $1,588.10 on Monday.
Spot gold, which tracks live trades in bullion, was down $12.73, or 0.8%, at $1,568.92 per ounce by 2:22 PM ET (19:22 GMT). It rose to as high as $1,588.62 in the previous sessions, its highest since Jan. 8.
TD Securities said contagion concerns over the coronavirus resulted in a classic flight to quality trade and “substantial uncertainty about the virulence and transmission of the virus, and incoming news should keep markets on edge,” helping gold and safe havens like U.S. Treasuries.
investors in gold are also on the lookout for what the Federal Reserve will announce on Wednesday in its policy statement for January.
The Fed cut rates by a quarter point for three months back to back last year, before ending that brief and relatively muted easing cycle in December.
While the U.S. economic outlook has been favorable since, few expect the Fed to raise rates in the near future — a development that should bode well for gold, especially if the coronavirus crisis continues.Original Article