Gold firms as dollar rebound loses steam

Bengaluru — Gold prices rose on Friday, as the dollar retreated, supported by the worry of soaring coronavirus cases in the US and Europe as well as uncertainty over the upcoming US presidential election.

Spot gold rose 0.5% to $1,875.76/oz by 3.57am GMT, but was on track for a third straight month of declines. US gold futures were up 0.5% at $1,877/oz.

The dollar index fell 0.2% against a basket of currencies, making bullion cheaper for holders of other currencies.

“The dollar rebound appears to have run its course,” said Edward Moya, senior market analyst at Oanda. “The virus spread is going to provide additional pressure on the Congress to deliver more support. That’s just going to bolster the stimulus trade going forward.”

The White House virus task force warned aggressive steps will be needed to curb the outbreak, with the US breaking its single-day record for new infections on Thursday. Europe has moved back to the centre of the global pandemic, with Germany and France ordering a second lockdown to curb the spread of infections. “Leading into the US elections I see it [gold] staying weak,” said Michael Langford, executive director at corporate advisory and consultancy firm AirGuide. “Regardless of whoever wins the election, there is going to be some form of stimulus programme and that’s positive for gold.”

Gold is up nearly 24% this year as unprecedented stimulus measures globally boosted the precious metal’s appeal as a hedge against inflation and currency debasement. The US presidential election is set for November 3 and opinion polls show Democrat contender Joe Biden with a significant edge nationally, but with a tighter lead in the battleground states that play a decisive role in the final result.

Silver climbed 1% to $23.51/oz. Platinum and palladium were up 1% at $855.77/oz and $2,213.71/oz, respectively.

Reuters