Gold slips on strong dollar, US stimulus doubts | The Daily Star
12:00 AM, October 27, 2020 / LAST MODIFIED: 01:23 AM, October 27, 2020

Gold slips on strong dollar, US stimulus doubts

Gold fell below the key psychological level of $1,900 on Monday to its lowest in more than a week, pressured by a firmer dollar and stalled progress in talks for a new US coronavirus aid package.

Spot gold fell 0.2 per cent to $1,897.35 per ounce by 0711 GMT, after hitting $1,890.19, its lowest since Oct. 15.

US gold futures were down 0.4 per cent at $1,898.20.

"There seems to be a lack of impetus to find extra buyers (for gold)... A lot of it is because we're trading in the looming shadow of the US elections and stimulus speculation," said IG Markets analyst Kyle Rodda.

The dollar rose 0.2 per cent against rivals. US House Speaker Nancy Pelosi on Sunday said the Trump administration was reviewing the latest plan for more COVID-19 relief and that she expected a response on Monday.

But with the presidential elections fast approaching, analysts said a victory for Democrat rival Joe Biden could help gold rally on a potential large stimulus package, especially amid COVID-19 cases surging in the United States.

France registered a record increase in infections over the weekend and Spain announced a state of emergency as cases surged through Europe.

Widely viewed as a hedge against inflation and currency debasement, bullion has gained 25 per cent this year as central banks and governments unveiled unprecedented stimulus to cushion the economic fallout from the pandemic.

A break below support at $1,887 per ounce could push gold lower to $1,872, according to Reuters technical analyst Wang Tao.

Elsewhere, auto-catalyst metals palladium shed 0.8 per cent to $2,372.80 while platinum fell 2 per cent to $883.14.

"Although supply shocks for the pair have eased in recent weeks, Chinese car sales continue to eclipse expectations, which paints a bullish picture into the year end and should keep prices buoyant," MKS PAMP said in a note.

Silver dipped 1.8 per cent to $24.14 per ounce.


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