Gold prices fell overnight as investors liquidated their long positions, but was en route to its best month since August based on massive amounts of stimulus intended to help the economy recover from the COVID-19 outbreak.

Spot gold fell 1.6 per cent to $US1,683.72 per ounce by 1820 GMT, having hit a low since April 22 at $US1,680.25. US gold futures settled down or 1.1 per cent, at $US1,694.20.For the month, bullion has risen more than 7 per cent having hit

$US1,746.50 an ounce on April 14, a more than seven-year high.”There’s some long liquidation after possibly some disappointment that it wasn’t moving higher… If we get below the key support level – $US1,662, it can drop much more,” said Edward Meir, analyst at ED&F Man Capital Markets.

“Concerns about the virus seem to be receding a little bit as more countries are opening up and loosening restrictions.

There isn’t as much a flight to safety deluge as we were seeing few weeks ago.

“UK Prime Minister Boris Johnson said Britain was now past the peak of its coronavirus outbreak and promised to set a lockdown exit strategy next week, joining other countries like United States, New Zealand and Australia gradually easing restrictions.

On Wednesday, the Fed kept interest rates near zero and promised to expand emergency programs as needed to help the battered economy. The Fed on Thursday widened a key program to nurse the “Main Street” economy through the coronavirus pandemic.

Bullion tends to benefit from widespread stimulus measures as it is often seen as a hedge against inflation and currency debasement.

Data showed millions more Americans filed claims for unemployment benefits last week, suggesting layoffs were spreading to industries that were not initially directly impacted by business closures and disruptions related to the coronavirus.

“The jobless claims are clearly probably one of the most dramatic economic indicators of how we’ve been affected by the coronavirus and I don’t see those jobless claims turning around quickly once we begin to reopen,” said David Meger, director of metals trading at High Ridge Futures.

In other precious metals, silver slipped 3.1 per cent to $US14.89 per ounce and is set for its biggest monthly rise since October.

Palladium climbed 2.0 per cent to $US1,974.97 per ounce, but was on track for its biggest monthly decline since November 2015.

Platinum was steady at $US774.88 and was poised for its first monthly gain in four.