A one kilo Swiss gold bar and US dollars gold coins are pictured in Paris on February 20, 2020.
JOEL SAGET| AFP via Getty Images
Gold prices held steady on Wednesday, as fears of a second wave of coronavirus infections offset optimism around a potential Covid-19 drug and a stronger U.S. dollar.
Spot gold was flat at $1,727.22 per ounce, as of 0054 GMT.
U.S. gold futures were steady at $1,737 per ounce.
Beijing reported new Covid-19 cases for the sixth day in the worst outbreak in the Chinese capital since early February, while new coronavirus infections hit record highs in six U.S. states on Tuesday.
Market participants are also keeping a close eye on escalating tensions globally, as Indian and Chinese troops clashed at their disputed border, while North Korea blew up an inter-Korean liaison office set up in a border town.
Gold is used as a safe investment during times of political and financial uncertainty.
The prospects of fresh support from the Federal Reserve and Bank of Japan also supported the safe-haven metal.
Limiting gold’s appeal, however, the dollar rose 0.1% against its rivals after a record increase in U.S. retail sales in May.
U.S. retail sales jumped a record 17.7% in May, blowing past the 8% increase analysts expected and supporting views the U.S. recession might be drawing to an end.
Better than expected U.S. economic data and an upbeat trial results for a Covid-19 treatment lifted investors appetite for riskier assets.
A cheap and widely used steroid called dexamethasone has become the first drug shown to be able to save the lives of Covid-19 patients in what scientists said is a “major breakthrough” in the coronavirus pandemic.
Palladium fell 0.5% to $1,922.13 per ounce, while silver gained 0.4% to $17.46, and platinum was mostly unchanged at $820.04.