Gold prices headed lower Wednesday, giving up some gains after bullion registered its largest percentage rise in more than a decade.
Some commodity analysts attributed the retrenchment to some exhaustion after two powerful sessions of gains for the yellow metal, as the U.S. Congress draws closer to passing a $2 trillion rescue package to help lessen the economic pain of the coronavirus pandemic.
“The gold price is slowing down after two impressive sessions of gains,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades, in daily note.
“The risk-on dynamic, which in the last 48 hours largely dominated the markets, is not supporting bullion prices, while investors are probably switching some liquidity back to stocks,” he wrote.
Gold for April delivery GCJ20, -1.70% on Comex fell $28.30, or 1.7%, at $1,632.50 an ounce, after surging 6% on Tuesday, where it booked its largest one-day dollar gain based on records dating back to November 1984, and biggest daily percentage rise since March 2009, according to Dow Jones Market Data.
“Technically we have a first support at $1,595, which is today’s low, while a clear break out above $1,630 would open space for further rallies,” De Casa said.
A report showing that U.S. orders for long-lasting, or durable, goods climbed 1.2% in February, didn’t impact bullion trading as it is now seen as historical.
May silver SIK20, +0.16%, meanwhile, rose 6 cents, or 0.4%, to reach $14.32 an ounce, after the white metal jumped 7.5% a day ago.
The outbreak of COVID-19, the infectious disease that has infected more than 450,000 people and killed nearly 19,000, has been one of the biggest supports for buying of asset perceived as havens.
Investors are watching for the response by governments across the globe to the deadly pathogen, including the U.S. where lawmakers agreed upon a $2 trillion coronavirus relief package, one that must still pass votes in both the Senate and House.
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