Gold prices fell on Monday as investors stockpiled cash, with a rising numbers of coronavirus-led national lockdowns threatening to overshadow stimulus measures from global central banks to combat the pandemic's economic damage. Spot gold slipped 0.6% to $1,488.00 per ounce by 0825 GMT, after rising as much as 3.1% in the previous session on a wave of stimulus.
US gold futures climbed 0.5% to $1,491.50. "For the time being, gold is not serving as a safe-haven because of margin calls and panic. There is capital outflow from everywhere," said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade.
"(Investors) are winding up their positions. It's not technical or fundamental - it's all panic." Asian shares sank as a rising tide of lockdowns threatened to overwhelm policymakers' frantic efforts to cushion what is likely to be a deep global recession.
Another concern is the possibility of central banks having to sell gold to buy dollars as the greenback continues to strengthen, said Stephen Innes, chief market strategist at financial services firm AxiCorp. Market participants are counting on further policy easing in the next few days as the US Senate mulls a $1 trillion package that would include direct financial help for Americans.
Airlines cancelled more flights as Australia and New Zealand advised against non-essential domestic travel, the United Arab Emirates halted flights for two weeks, and Singapore and Taiwan banned foreign transit passengers.
Spot gold is expected to retest a support at $1,452 per ounce, a break below which could cause a fall to $1,374, said Reuters technical analyst Wang Tao.