Gold price steady as buoyant dollar, US aid doubts offset virus risks
New York (Oct 27) - Gold held steady on Tuesday as a buoyant dollar and lack of progress on a U.S. stimulus package countered
fears of a second coronavirus wave and uncertainty about the U.S. presidential elections.
Spot gold was flat at $1,902.31 per ounce at 1135 GMT. U.S. gold future were down 0.1% to $1904.30.
"Gold has done most of its leg work for the year and seems
to be trading in narrower ranges at the moment, responding to
small moves in the dollar, which in turn is responding to small
moves in possible political outcomes in regard to the U.S.
election and also the stimulus plan," said independent analyst
Ross Norman.
But rising coronavirus cases, especially in Europe, are
keeping gold supported, more so because of the possible economic
fallout, he added.
A fresh wave of infections has forced many countries,
including Russia and France, to impose new restrictions, risking
derailing any global economic recovery.
The dollar index held onto gains against rival
currencies, denting the appeal of bullion.
Negotiations over a new U.S. relief package remain in limbo
with House Speaker Nancy Pelosi expressing hope that an
agreement can be reached before the Nov. 3 presidential
election, while White House economic adviser Larry Kudlow
indicated that talks have slowed.
Gold, considered a hedge against inflation and currency
debasement, has risen 25% this year, supported by massive
government and central bank stimulus worldwide.
Gold consumption in China, traditionally the world's biggest
consumer of bullion, rebounded in the third quarter, the China
Gold Association said, while dealers in India have been banking
on a festival-led demand boost.
Elsewhere, palladium remained unchanged at $2,352.64
per ounce, while platinum rose 0.5% to $873.68.
Palladium could test $2,600 by mid-2021 bolstered by market
tightness and stimulus measures, UBS said in a note.
Silver was flat at $24.31 per ounce.
Reuters
