Gold falls as dollar firms, safe-haven demand caps losses

Gold prices fell in European trade on Thursday, to head for the second daily loss in 3 days, as the US dollar rose against a basket of currencies, but gold's losses are ebbed due to increased safe-haven demand amid concerns about the spread of coronavirus in China to become a global pandemic.

Gold prices fell by 0.4% to $1,552.99 an ounce, after opening at $1,558.96, and hit a day high of $1,563.65.

Gold closed flat yesterday, after it lost 0.2% in the previous day, on profit taking from a two-week high of $1,568.58.

The dollar index rose by 0.1% today, moving toward its first daily gain in 4 days, which weigh down on gold and other dollar-denominated metals.

The new influenza-like coronavirus in China led to 17 fatalities, and nearly 600 people infected, prompting the Chinese authorities to lockdown Wuhan city, which has a population of 11 million people, as it is believed that the virus started in that city .

This mounted the concerns about a spread of the Chinese virus into a global pandemic, leading to slowdown in global travel and trade movements, and spooking investors in high-yield assets.

Gold holdings at the SPDR Gold Trust Fund remained unchanged yesterday, at a total of 898.82 metric tonnes, the highest since November 8.