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Gold flat as virus fears offset gains in equities

Kitco News

By Nakul Iyer

July 3 (Reuters) - Gold prices were little changed on Friday as worries over an accelerating number of coronavirus cases countered a fillip to risk sentiment from positive U.S. and Chinese economic data.

Spot gold was mostly unchanged at $1,775.32 per ounce by 1152 GMT. Most U.S. markets are closed on Friday ahead of Independence Day on July 4.

U.S. gold futures edged down 0.2% to $1,787.20 per ounce. "Central bank easing policies and uncertainty surrounding the second wave (of COVID-19) are sustaining gold prices," Bank of China International analyst Xiao Fu said, adding that despite a positive U.S. jobs report, more data was needed to suggest the economy was on a strong footing.

Gold will likely trade in a tight range, but remains well supported above $1,750 an ounce, Xiao Fu said.

Cases of coronavirus continued to increase globally, with more than 10.89 million people infected, while the United States reported a new daily global record number of cases. "Geopolitical considerations are also to the fore," said Jeffrey Halley, a senior market analyst at OANDA. "With a holiday in the United States, and the weekend upon us, some haven-directed buying of gold is definitely evident."

Escalating political tensions, more than 75 members of the U.S. Congress sent a letter to President Donald Trump urging him to make a formal determination on whether China's treatment of Muslim Uighurs and other groups constituted an atrocity. Indicative of sentiment, holdings of the SPDR Gold Trust , rose 0.8% to 1,191.47 tonnes on Thursday. But stemming gains in bullion, data showing a recovery in China's services sector and a record addition of jobs to the U.S. economy in June, helped world shares inch towards a four-month high. Palladium fell 0.3% to $1,896.34 per ounce, while platinum rose 0.1% to $803.91 per ounce, set for its first weekly gain in six.

Silver gained 0.4% to $17.97 per ounce, heading for its fourth consecutive weekly gain.

(Reporting by Nakul Iyer in Bengaluru; editing by David Evans and Pravin Char)

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