Gold pares biggest weekly advance since July with Trump defiant

Gold fell to trim the biggest weekly gain since July as investors awaited the final outcome of the US election, weighed prospects for further stimulus, and tracked shifts in the dollar after it hit a 30-month low.

President Donald Trump questioned the credibility of the election, complaining polls had overstated Joe Biden’s lead in many battleground states, and the count of mail-in votes was eroding his lead in Pennsylvania and Georgia. Biden strengthened his hold on the race on Thursday, expressing confidence in a win.

After holding in a narrow range for most of October, gold broke out on Thursday as uncertainty over the election results and renewed stimulus hopes amid a worsening pandemic boosted demand for the haven asset. Federal Reserve Chair Jerome Powell opened the door to a possible shift in the central bank’s bond purchases in coming months, saying that more fiscal and monetary support are needed.

“Trump’s comments renewed some concerns with regards to political uncertainties, which saw the dollar rise to weigh on gold,” said Jingyi Pan, a market strategist at IG Asia Pte. Still, the outlook remains positive for gold on lingering US political uncertainties and the sustained accommodative stance by the Fed, she said.

Spot gold traded 0.6% lower at $1,937.69 an ounce at 6:28 a.m. in London. Prices surged as much as 2.6% on Thursday to the highest level since September 21, and are up 3.1% this week, the most since the five days ended July 31. Silver fell 1.4%, platinum dropped 0.6%, and palladium rose 0.3%. The Bloomberg Dollar Spot Index climbed 0.1% from the lowest since 2018.

The Fed kept interest rates near zero and held bond purchases at a $120 billion monthly pace at its meeting ending Thursday. The US non-farm payrolls report is due Friday.