By Barani Krishnan
Investing.com - Having regained its mojo as safe haven of choice to break from weeks of range-bound trading, gold rocketed to 2012 highs on Tuesday, setting at mid-$1,700 highs before retreating on the notion that the U.S. was gaining momentum in its fight against the coronavirus.
The itch among some gold holders to cash out after a three-day rally also took some shine off the precious metal in its New York session.
Gold futures on New York’s COMEX settled down $12.20, or 0.7%, at $1,664.80 per ounce. It hit $1,742.20 at the session high, bettering Monday’s $1,709.50 peak, before investors took note of reports that the Covid-19 infection rate in New York, the U.S. epicenter for the pandemic, was stabilizing despite daily death tolls in the hundreds.
“Gold’s rally hit a brick wall as optimism continues to grow that the virus peak is nearing,” said Ed Moya, analyst at online trading platform OANDA.
“Investors should not be surprised with gold’s volatility, and while the rally appears to have some buying exhaustion, the bullish outlook is firmly intact,” Moya added. “Gold should see massive support from the $1,650 level and eventually eye the $1,800 level.”
Spot gold, which tracks live trades in bullion, was down $16.38, or 1%, at $1,646.57 by 3:00 PM ET (19:00 GMT).
Tuesday's peak above $1,740 was the highest for COMEX gold since the $1,750 peak set in November 2012. The $1,700 level has been a rather important resistance mark for gold, with COMEX futures breaking past the barrier only on three occasions this year — the first in January, then in March and twice in the past two days. On all occasions, the yellow metal fell back soon after the test.
Tuesday's slide marked gold’s first down day after a three-day run-up that added nearly $100, or 6%, to COMEX futures and bullion.