(Adds comment, graphic and updates prices)
* Asian share markets on defensive
* Dollar hovers close to two-week high
* Interactive graphic tracking the global spread: open https://tmsnrt.rs/3aIRuz7
in an external browser
By K. Sathya Narayanan
April 22 (Reuters) - Gold prices slipped on Wednesday as a
stronger dollar and dash for cash following a historic rout in
U.S. crude oil futures eclipsed support from safe-haven buying.
Spot gold XAU= eased 0.2% to $1,682.35 per ounce by 0623
GMT, after touching a near two-week low on Tuesday as the oil
rout triggered a panic sell-off in wider markets, fuelling a
rush for liquidity.
U.S. gold futures GCv1 rose 1% to $1,704.10.
"There is a tussle between safe-haven buying and the need
for cash," said Cameron Alexander, an analyst with
Refinitiv-owned metals consultancy GFMS, adding that a stronger
dollar also weighed on bullion.
Traders will move from riskier assets to safe havens if
stocks drop, he said, adding that investors were also hoarding
cash to protect themselves from another sell-off in equities.
Against key rivals, the dollar .DXY hovered near a
two-week high scaled on Tuesday. USD/
Asian share markets were on the defensive as the floor fell
out from under crude prices, exposing the deep economic damage
from the coronavirus pandemic. MKTS/GLOB
Oil prices slumped again on Wednesday, with Brent falling to
the lowest since 1999, as the market continues to be plagued by
a mounting supply glut and a virus-led demand collapse. U.S.
crude futures fell into negative territory for the first time
ever on Monday. O/R
Gold may come under pressure in the longer term as it is
used as a hedge against inflation and falling crude prices tend
to rise deflationary pressures in the market, analysts said.
However, massive monetary and fiscal stimulus measures by
global central banks, especially the U.S. Federal Reserve, and
governments will keep gold supported, analysts added.
Gold tends to benefit from widespread stimulus measures from
central banks, as it is often seen as a hedge against inflation
and currency debasement.
The U.S. Senate on Tuesday unanimously approved $484 billion
in fresh relief for the world's largest economy. On the technical front, spot gold may revisit its Tuesday
low of $1,659.68 per ounce, as suggested by its wave pattern,
according to Reuters market analyst Wang Tao. TECH/C
Reflecting investors' appetite for gold, holdings in the
world's largest gold-backed exchange-traded fund, SPDR Gold
Trust GLD , rose 0.4% to 1,033.39 tonnes on Tuesday. GOL/ETF
Among other precious metals, palladium XPD= rose 2.6% to
$1,972.57 per ounce, having touched a near one-month low in the
previous session.
Platinum XPT= gained 0.4% to $749.27 per ounce, while
silver XAG= fell 0.8% to $14.80.
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