Gold inches up on weaker dollar before US presidential election debate

Bengaluru — Gold edged up on Monday as the dollar slipped off a two-month peak it hit last week, due to caution as political uncertainty built ahead of the first presidential election debate between US President Donald Trump and his Democratic rival, Joe Biden.

Spot gold had risen 0.1% to $1,861.02 per ounce by 5.26am. US gold futures were down 0.1% at $1,863.70.

“Gold is going to be driven by the tenor of the US dollar,” said Stephen Innes, chief market strategist at AxiCorp.

“The big move is probably going to occur after the presidential debate when we have a better read on where the polls are going to be sitting.”

The dollar index was down 0.2% against rivals, slightly off a two-month peak hit last week. A firmer dollar makes bullion more expensive for holders of other currencies.

Trump and Biden will have their first presidential election debate on Tuesday.

Investor focus will also be on a new fiscal support package after US House Speaker Nancy Pelosi said on Sunday a deal could be reached with the White House on a coronavirus relief package and that talks were continuing.

“I don’t think they are expecting a big deluge but some sort of middle ground,” Innes added.

Global central banks and governments have released huge stimulus to prop up their economies from the impact of the Covid-19 pandemic, pushing gold more than 20% higher this year. However, prices have retreated by about 10% since hitting a record peak in August.

Speculators reduced their bullish positions in Comex gold and silver contracts in the week to September 22, data from US Commodity Futures Trading Commission showed.

Among other precious metals, silver dipped 0.2% to $22.81 per ounce, platinum gained 0.5% to $851.46 and palladium rose 0.1% to $2,218.76.

Reuters