Gold Eases On Stronger Dollar; COVID-19 Concerns Limit Fall

Gold has risen about 25% so far this year

Gold prices eased on Wednesday due an uptick in the dollar, but uncertainty going into next week’s US presidential election and concerns over a spike in coronavirus cases in Europe and the US limited bullion’s losses.

Spot gold was down 0.3 per cent at $1,900.52 per ounce by 0931 GMT (3:01 pm in India). US gold futures fell 0.5 per cent to $1,902.30 per ounce.

“The dollar has strengthened, which is pressuring gold a bit. Overall, the gold market is in a wait-and-see mode until the US election,” said Robin Bhar, an independent analyst.

“There is still pretty good buying (on the dips). Investors believe in the long term structural positive factors for gold, like high debt, weakening dollar, fears of inflation, COVID-19 situation.”

The dollar rose 0.5 per cent to a more than one-week high versus its rivals, making gold more expensive for holders of other currencies. 

The US, Russia, France and other countries have registered a record numbers of coronavirus infections in recent days.

Meanwhile, US President Donald Trump on Tuesday said that an economic relief deal would likely come after the November 3 election despite a rise in infections and a stalling labour market recovery.

Gold, which has risen about 25 per cent so far this year, is considered a hedge against inflation and currency debasement amid the unprecedented global levels of stimulus.

Focus was on the US elections, with Democratic challenger Joe Biden leading Mr Trump in nationwide polls.

“Gold prices are being kept in check by the dollar index. Gold’s adherence to a tight range also indicates that some investors remain sceptical over the prospects of a ‘blue wave’,” said FXTM market analyst Han Tan.

Elsewhere, silver slipped 1.2 per cent to $24.26 per ounce, platinum eased 0.2 per cent to $876.84, while palladium gained 0.2 per cent at $2,335.69.


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