Gold edges lower as caution sets in

Bengaluru — Gold prices eased on Tuesday, trading in a narrow range, as caution set in ahead of the deadline to reach an agreement on a new US coronavirus stimulus package and the upcoming presidential election.

Spot gold fell 0.2% to $1,901.16 an ounce by 3.35am GMT. US gold futures were down 0.3% at $1,905.20.

“A lot of investors are on the sidelines and also in particular because the US elections are coming up,” Brian Lan, MD at GoldSilver Central said, adding that a stimulus will make prices test the higher end of the $1,882-$1,932 range.

US House of Representatives speaker Nancy Pelosi and treasury secretary Steve Mnuchin “continued to narrow their differences” about a fresh aid package in a telephone conversation, her spokesperson Drew Hammill said.

Pelosi hopes that by the end of Tuesday there will be “clarity” on whether a coronavirus stimulus bill can be passed before the November 3 elections, Hammill wrote on Twitter.

A huge stimulus from the Democrats could revive precious metals trading as they have been losing their mojo without additional stimulus, Avtar Sandu, a senior commodities manager at Phillip Futures, said in a note.

Gold is considered a hedge against inflation and currency debasement amid the unprecedented levels of global stimulus to ease the economic blow from the pandemic.

Investors are eyeing the final debate between US President Donald Trump and his Democratic challenger Joe Biden on Thursday to see if it shifts the trajectory of the election.

The dollar index was flat against its rivals, while Asian stocks slipped as investors adjusted risk exposure heading into the US election.

Elsewhere, silver fell 0.1% to $24.47 an ounce, platinum was steady at $856.71 and palladium rose 0.1% to $2,345.43.

Reuters