(Reuters) – Gold prices fell 1% on Tuesday, retreating from a one-month high hit earlier in the session as risk sentiment improved on wider market optimism that the coronavirus pandemic may be easing.

Spot gold was down 0.3% at $1,657.50 per ounce by 0852 GMT, after rising to a one-month high of $1,671.40. The metal had risen as much as 2.8% on Monday.

“Risk appetite is back in the markets as new infections are declining, that’s weighing on gold prices. Also higher yields are negative for gold,” said Quantitative Commodity Research analyst Peter Fertig.

“However, some investors fear that monetary policy would lead to inflation. For them, buying gold at these levels remains attractive.”

Cautious optimism around a slowdown in coronavirus cases lifted European shares higher for a second straight day, even as major companies continued to take steps to shore up cash after lockdowns crushed global demand.

More than 1.32 million people have been reported infected by the virus across the world and 74,087 have died. British Prime Minister Boris Johnson was taken into intensive care on Monday after his symptoms worsened.

The pandemic has rattled financial markets around the world over the course of the last quarter and prompted nations to extend lockdowns to curtail its spread.

Japanese Prime Minister Shinzo Abe was set to announce a state of emergency for the capital, Tokyo, and six other prefectures and unveiled plans for a stimulus package to support the economy.

“Gold investors are revelling in the level of central bank stimulus and fiscal spending, especially when it raises government debt levels,” said Stephen Innes, chief market strategist at financial services firm AxiCorp, in a note.

Indicative of sentiment, the holdings of world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.5% to 984.26 tonnes on Monday – its highest in over three years.

U.S. gold futures rose 0.5% to $1,701.60, extending a lead over London spot prices, signalling market worries that refinery closures and logistics constraints could hamper bullion shipments to the United States to meet contract requirements.

The increase came despite measures from the CME Group’s Comex Exchange to ease supply concerns and assurances from the London Bullion Market Association.

Palladium gained 1.3% to $2,183.70 per ounce after surging more than 3% in early trading. Platinum climbed 1.1% to $$743.43.

Silver jumped 1.3% to $15.18 an ounce, having touched a more than three-week high earlier.