By Shreyansi Singh
(Reuters) – Gold eased on Thursday as investors booked profits from a near 2% rally in the previous session, while U.S. stimulus measures to ease the economic blow from the coronavirus outbreak limited losses and kept prices above $1,700 an ounce.
Spot gold slipped 0.3% to $1,707.76 per ounce by 0305 GMT, after gaining as much as 1.9% in the previous session.
U.S. gold futures fell 0.3% to $1,733.40 per ounce.
“The market is probably more inclined to take profit on gold, simply because they are nearing the highs of the recent range,” said Stephen Innes, chief market strategist at financial services firm AxiCorp.
“The U.S. kicked in more stimulus, which is really positive for gold because it increases fiscal deficits in the country. And with these low interest rates staying low, this is just a welcoming relief.”
Against key rivals, the dollar climbed to a more than two-week peak earlier in the session, making gold costlier for investors using other currencies.
Asian stock markets rose on Thursday as the combination of a rebound in crude prices from historic lows and the promise of more U.S. government aid to cushion the coronavirus-ravaged economy helped calm nervous markets.
The U.S. House of Representatives expects to pass a nearly $500 billion coronavirus relief bill on Thursday but will put off any decision on changing its voting rules during the pandemic, avoiding a potential partisan fight.
“In a nutshell, gold investors are more impressed with the bullish aspect of more fiscal spending than with the bearish impact of higher equities,” Innes added.
The pandemic has prompted governments and central banks around the world to unleash unprecedented fiscal and monetary support for economies.
The European Central Bank said on Wednesday it would let banks post collateral that was downgraded to junk during the coronavirus outbreak to prevent a credit squeeze in the euro zone.
Gold tends to benefit from widespread stimulus measures from central banks since it is seen as a hedge against inflation and currency debasement.
Market participants also awaited U.S. initial weekly jobless claims data due at 1230 GMT.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, holdings rose 0.9% to 1,042.46 tonnes on Wednesday.
Among other precious metals, palladium rose 0.2% to $1,942.52 an ounce.
Platinum fell 0.4% to $754.47 per ounce, while silver gained 0.2% to $15.18 per ounce.
(Reporting by Shreyansi Singh in Bengaluru; Editing by Ramakrishnan M.)