Gold steadied after posting the biggest weekly advance since 2008 amid investor caution on policies aimed at mitigating the impact of the global coronavirus pandemic.
With signs that the historic gold squeeze is easing, investors’ focus returns to measures from governments and central banks to cushion the fallout from the virus. President Donald Trump signed a $2 trillion economic stimulus package Friday, the largest in U.S. history, while the Federal Reserve has pledged unlimited bond purchases. Elsewhere, the European Central Bank scrapped most of the bond-buying limits in its pandemic emergency program.
“The precious metal sector has been the clear winner from the unprecedented U.S. fiscal measures to support the reeling economy,” analysts at Australia & New Zealand Banking Group Ltd. said in a note.
Spot gold retreated 0.5% to $1,620.76 an ounce at 9:21 a.m. in Singapore after earlier gaining 0.6%. Prices jumped 8.6% last week. The Bloomberg Dollar Spot Index added 0.2%.
The spread between London and New York prices stood at about $35 an ounce on Monday, compared with more than $60 last week. Money managers cut their short position in gold by 78% in the week ended Tuesday, the most in government records going back more than a decade.
In other precious metals, silver fell 2.2%, platinum dropped 2%, and palladium advanced 1.7%. Holdings in exchange-traded funds backed by palladium are near the lowest since 2008.