By Geoffrey Smith
Investing.com -- Gold prices fell on Monday, as retail investors again came under pressure to liquidate in the wake of fresh pressure on risk assets amid fears of a second wave of coronavirus infections.
By 11:30 AM ET (1530 GMT), gold futures for delivery on the Comex exchange were down 0.5% at $1,728.20 an ounce, having earlier fallen as low as $1,706.35. Spot gold was down 0.6% at $1,721.28.
Elsewhere, silver futures lost 0.7% to $17.36 an ounce, while platinum futures fell 0.2% to $871.40 an ounce.
Last week’s selloff in equities had already necessitated the biggest liquidation of speculative positions in U.S. futures contracts since mid-April, according to data released late on Friday by the Commodity Futures Trading Commission. Net speculative long positions fell by some 35,000 contracts to their lowest in nearly a year.
Even so, retail and institutional interest in bullion remains at a historically high level. More money flowed into gold-backed exchange-traded funds in the first five months of this year than in any full calendar year in history, according to data compiled by the World Gold Council.
The risk-off mood that has for the most part served gold well this year was back in force in global markets on Monday, after the Chinese and Japanese capitals both reported a fresh spike in new cases of the Covid-19 virus. The mood was reinforced by data showing Chinese industrial production and retail sales both struggling to recover in May.
Coming against the backdrop of a worrying uptick in new U.S. cases in recent days, notably in southern states, the figures stoked fears of another wave of infections that could derail the rapid economic recovery that many investors have bet on in recent weeks.
Other haven assets remained well supported. The U.S. 10-year benchmark Treasury yield, which had hit 0.90% earlier in June on bets on a so-called V-shaped recovery, was back at 0.69% by 11:30 AM ET.
The bid for bonds was helped by comments from Dallas Federal Reserve President Robert Kaplan, who said in a public appearance on Monday that the Fed “should look at” yield curve control, a strategy that would keep nominal and real interest rates under long-term downward pressure.
Gold typically performs well when real interest rates are low or negative, as they are currently.