Gold down as potential Japanese stimulus boosts risk appetite

Gold declined on Monday as Japanese

equities rose on news of a potential stimulus program that

boosted investors’ risk appetite, though fresh tensions over

Hong Kong limited the metal’s fall.

Spot gold fell 0.4% to $1,728.06 per ounce by 0252

GMT. U.S. gold futures were down 0.4% at $1,728.50.

“I think the play into stocks and other risk assets has

probably supported the risk appetite, and diminished the appeal

for gold in the short term,” said IG Markets analyst Kyle Rodda.

“There still seems to be the broad issue of gold prices

trying to break too far above the 1,740, 1,750 mark.”

Gold on Friday rose as much as 0.8% to touch $1,739.51,

before paring gains.

Japan is considering fresh stimulus worth over $929 billion,

which mostly consists of financial aid programs for companies

hit by the coronavirus pandemic, the Nikkei newspaper said.

Japan’s Nikkei jumped 1.5% following the report.

Highlighting a return of political uncertainty, thousands

rallied on Sunday to protest against Beijing’s plan to impose

national security laws on Hong Kong.

The proposed national security legislation for Hong Kong

could lead to U.S. sanctions and threaten the city’s status as a

financial hub, White House National Security Adviser Robert

O’Brien said on Sunday.

Gold is seen as a safe-haven asset during political and

economic uncertainties.

Reflecting investor sentiment, SPDR Gold Trust

holdings, the world’s largest gold-backed exchange-traded fund,

rose 0.4% to 1,116.71 tonnes on Friday.

Palladium gained 0.3% to $1,951.63 per ounce, while

platinum was down 1.8% at $824.68 and silver fell

0.5% to $17.09.

(Reporting by Harshith Aranya and K. Sathya Narayanan in

Bengaluru;

Editing by Vinay Dwivedi)