(Reuters) – Gold fell more than 1% on Monday as the dollar hovered near a more than one-week high, but the metal held above $1,700 an ounce, buoyed by fears of a second wave of coronavirus infections.

Spot gold fell 0.6% to $1,719.67 per ounce by 12:47 p.m. ET (1647 GMT). U.S. gold futures was down 0.6% at $1,726.50 per ounce.

“In a risk-off mood, the dollar becomes a favorable asset and that’s pressuring gold,” said David Meger, director of metals trading at High Ridge Futures.

“But since the U.S. Federal Reserve meeting, we have been crawling down because the gold market did not get more monetary stimulus from the Fed; no additional rate cuts or asset purchases.”

The Fed maintained its key overnight interest rate in target range of zero to 0.25 percent last week.

Against a basket of currencies, the dollar eased but still held near a more than one-week high hit in the previous session.

Beijing has recorded dozens of new cases in recent days, while new infections in record numbers swept through more U.S. states.

Bullion also faces deflationary pressures in the short term, said Saxo Bank analyst Ole Hansen.

“Inflation is collapsing with the drop in consumer demand and the slow reopening of economies,” Hansen said. “So that’s removing the demand for gold.”

Speculators cut their bullish positions in COMEX gold and silver contracts in the week to June 9.

On the technical front, “there is a lot of resistance at around $1,740 and the flow of fund is not sufficient,” said Bart Melek, head of commodity strategies at TD Securities.

But virus fears pressured Wall Street, keeping gold above the key psychological level of $1,700 an ounce, with analysts saying the long-term trajectory for gold was still positive.

Palladium fell 0.2% to $1,914.85 an ounce, platinum rose 0.9% to $812.84 per ounce, after touching a one-month low of $780.05, and silver fell 0.9% to $17.29, having earlier hit a near three-week low of $16.93.