Investing.com - Gold fell for the first time in 11 sessions on Tuesday, halting its ponderous run toward the $1,700 level after analysts’ cautioned that the rally spurred by investor fears over the coronavirus contagion could reverse.
Gold futures for April delivery on New York’s COMEX settled down $26.60, or 1.6%, at $1,650 per ounce. Just on Monday, the benchmark hit a seven-year high of $1,651.85.
Spot gold, which tracks live trades in bullion, was down $9.99, or 0.6%, at $1,650.43 by 3:30 PM ET (20:30 GMT). Bullion struck $1,689 in the previous session, its highest since January 2013.
Tuesday’s slide in gold came a day after analysts at TD Securities noted that longs in the yellow metal had entered new territory of “dry-powder positioning”, which it said was “off the charts” and could trigger a market reversal.
Still, it was rare for gold to slump along with stocks on Wall Street, which were headed for another major down day following Monday’s worst one-day crash in two years on the Dow and S&P 500.
Stocks fell as the U.S. Centers for Disease Control and Prevention said a spread of Covid-19 in the U.S. was "inevitable" and warned Americans to prepare for disruptions in their daily lives, leading to another mass selling of stocks and buying of bonds.
But some viewed the drop in gold positively.
“Just like in most bullish trends, pullbacks are healthy and today’s slide towards $1,650 an ounce could be viewed as a buying opportunity,” said Ed Moya, analyst at New York-based OANDA. “If the $1,650 an ounce level holds, gold may not struggle too much to break the $1,700 an ounce level."