Gold prices drop as U.S. congress concludes deal on $2 trillion stimulus package

Gold prices dropped on Thursday in Asian markets following a U.S. congress announcement reaching a deal to roll out a $2 trillion financial stimulus in a bid to bolster an economy heavily impacted by the coronavirus.

Gold Futures was unable to maintain steady gains and last traded below 0.2% to $1,629.80 by 9:24 PM ET (1:24 GMT)

In an overnight announcement, senators from U.S. congress said that the deal for the $2 trillion relief package was closing in to the voting stage as they finalize the text of the bill.

Asian equity markets had mixed sentiments on the news as investors practiced caution as the virus continues to spread.

“The big downside risk (in gold) remains the potential for those sharp sell-offs in equity markets to be repeated,” Craig Erlam, an analyst at Oanda, said in a note. 

However, others expressed optimism in the precious metal.                               

“We still see a favorable backdrop for gold as the economic fallout from the corona crisis should strengthen safe-haven demand,” Julius Baer analyst Carsten Menke said in a CNBC interview.