Gold lost ground Wednesday, sliding below the psychologically important $1,700-an-ounce level as an ongoing stock-market rally in response to easing COVID-19 lockdowns robbed the yellow metal of its haven appeal.

Gold for June delivery on Comex dropped $12.60, or 0.7%, to $1,693 an ounce, while July silver was off 13 cents, or 0.7% at $17.465 an ounce.

A dip below $1,700 could turn into a further correction, said Carsten Fritsch, analyst at Commerzbank, in a note. U.S. equities rose sharply on Tuesday as investors returned from a three-day holiday weekend, boosted by optimism over the easing of lockdowns and by fiscal and monetary stimulus efforts by governments and central banks.

Global equities remained in rally mode on Wednesday, with stock-index futures pointing to another round of strong gains for U.S. equities.

Source : Marketwatch