By Alex Ho
Investing.com - Gold prices fell more than 2% on Tuesday in Asia and is set to record their first decline in five days.
Gold Futures for April delivery fell 2.3% to $1,638.75 by 1:59 AM ET (05:59 GMT).
Increase in the number of new coronavirus cases outside of China over the past few days provided support for the safe-haven metal, which has risen to its 7-year highs last week.
Multiple Middle East countries reported their first coronavirus cases today, while spreading of the virus continued to widen in South Korea and Italy.
Profit taking was cited as the reason for the selling in gold today, although growing fears over a spike in new coronavirus cases capped bullion's losses.
"The 1% fall was because of margin calls but definitely that has triggered an added wave of profit-taking," said Stephen Innes, chief market strategist at AxiCorp, in a Reuters report.
"In this kind of an environment, when stock markets are crashing it is easy to cover margin call. (But) given the overwhelmingly risk-off market, we should see gold find some support," he added.
Some analysts believe the worsening virus situation might press the U.S. Federal Reserve to cut interest rates to support the economic growth.
Lower interest rates boost the appeal of asset classes like gold that don't yield any interest.
Meanwhile, U.S. Treasury Secretary Steven Mnuchin told Reuters in an interview that he does not expect the outbreak to have a material impact on the Phase 1 U.S.-China trade deal, although that could change as more data becomes available in coming weeks.