Gold retreated 1 per cent overnight as investors booked profits and Wall Street rallied on optimism over economies emerging from coronavirus-led shutdowns.

Spot gold fell 0.7 per cent to $US1,727.23 per ounce, giving up some gains from earlier in the session. US gold futures settled down 0.9 per cent at $US1,734.

“There is continuation of optimism in regards to the reopening of the economy, shown in the ongoing rally in equities… Under that premise, it’s easy to understand gold could be slightly vulnerable,” said David Meger, director of metals trading at High Ridge Futures.

US equities rose as optimism around reopening businesses overshadowed fears of Sino-US trade tensions and protests in the country.

However, gold’s overall trajectory is positive, analysts said, with the metal having gained over 18 per cent after touching a near four-month low of $US1,450.98 in March, mostly benefiting from economic uncertainties fuelled by the pandemic and a flurry of stimulus from global central banks.

On the US-China front, two sources told Reuters China told state-owned firms plan to halt large-scale US soybean and pork purchases, with one of them saying state purchases of US corn and cotton have also been put on hold.

“If you see emotions heating up between US and China over Hong Kong – that’s going to change the trade dynamic with Hong Kong. More people will gravitate towards gold,” said Michael Matousek, head trader at US Global Investors.

Safe-haven bullion got further support after US President Donald Trump vowed to use the military to halt widespread protests in US cities over the death of a black man in police custody.

Meanwhile, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust rose to 1,128.40 tonnes on Monday, the highest in seven years.

Elsewhere, palladium eased 0.2 per cent to $US1,956.74 per ounce, while platinum fell 0.5 per cent to $US843.27. Silver slipped 1.5 per cent to $US18.00 per ounce.

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