Gold prices nudged up, supported by growing fears over the global economic recovery from the coronavirus crisis, although a stronger U.S. dollar limited the safe-haven metal's upside.
Spot gold was trading 0.1 percent higher at $1,931.56 per ounce by 0714 GMT, having hit a low of $1916.69 on Friday, its lowest since August 27. U.S. gold futures rose 0.2 percent to $1,937.70.
Coronavirus cases rose in 22 of the 50 U.S. states, while cases in India and Britain also flared up, denting optimism about global economic recovery. Data released earlier showed, Japan’s economy shrank an annualised 28.1 percent in April-June, worse than the initial estimate of a 27.8 percent contraction.
Meanwhile, data out of Australia showed employment declined over the month to Aug. 22, while last month’s business confidence remained fragile.
The dollar index rose against its rivals, as euro tumbled on expectations of an accommodative turn from the European Central Bank later this week, while sterling plunged due to Brexit uncertainty.
The euro declined as investors turned cautious ahead of the European Central Bank’s policy decision on Thursday. Markets don’t expect a change in the central bank’s policy stance but will closely listen to the message on its inflation forecasts and whether it seems concerned over the euro’s recent rally.
The British pound plunged to a near 2-week low as the prospects of a hard Brexit resurfaced after the European Union told Britain that there would be no trade deal if it tried to override the Brexit divorce treaty.
The greenback against a basket of currencies traded 0.1 percent up at 93.12, having touched a high of 93.24 on Friday, its highest since August 27. The U.S. Treasury yields eased, with the benchmark 10-year note yield trading at 0.708 percent.