Gold slid more than 1% on Tuesday as Chinese steps to mitigate the economic impact from the coronavirus epidemic drove some investors away from safe havens and back into riskier assets. Spot gold was down 1.4% at $1,553.79 per ounce by 1555 GMT, after hitting its lowest since January 22 at $1,550.75. US gold futures fell 1.6% to $1,557.50.
"The dramatic move in global equity markets, especially in the US markets, clearly indicates there is lesser concern about coronavirus denting GDP and we have a lesser need for safe havens," said David Meger, director of metals trading at High Ridge Futures.
Wall Street built on a recovery in world stocks as fresh intervention by China's central bank calmed investor nerves.
Beijing's efforts included signing off on more government spending, tax relief and subsidies for virus-hit sectors, policy sources said.
"In case the impact of the virus is less than the market has priced in, it could lead to a correction in gold prices, but as long as we don't see economic growth accelerate, gold prices will remain supported," said Quantitative Commodity Research analyst Peter Fertig.
Some traders have also started to price in a cut to US interest rates by June. Lower interest rates reduce the opportunity cost of holding the non-yielding bullion. However, gold should stay within a range of $1,550 to $1,600 an ounce ahead of more political and economic headlines, George Gero, managing director at RBC Wealth Management, said in a note.
On the economic front, new orders for US-made goods rose 1.8% in December, beating analysts' consensus forecast of a 1.2% gain.
Among other precious metals, palladium was up 4.2% at $2,417.50, after touching its highest since January 27 at $2,425. Silver fell 0.4% to $17.59, while platinum was down 0.8% at $958.38.
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