Gold steadies at $1,900 as dollar firms

Bengaluru — A firmer dollar held back gold near the $1,900 per ounce psychological level on Monday even as US House Speaker Nancy Pelosi raised hopes for a coronavirus relief package before the presidential election.

Spot gold was up 0.1% at $1,900.79 per ounce by 5.45am, while US gold futures were down 0.2% at $1,903.40.

“We expect gold to trade cautiously about $1,900 level for now, the game changer being whether we can get [US] fiscal stimulus in the next 48 hours,” said Howie Lee, an economist at OCBC Bank.

Pelosi said on Sunday that differences remained with the Trump administration on a wide-ranging coronavirus relief package but that she was optimistic legislation could be pushed through before Election Day. However, Pelosi acknowledged an agreement would have to come within 48 hours for that to happen.

Gold, widely viewed as a hedge against inflation and currency debasement, has risen about 25% this year as governments and central banks unleashed a wave of stimulus measures to limit economic damage from the pandemic.

“The bigger buyers are going to remain buyers on the dips because gold is going to hold its value because of all the stimulus coming,” said Stephen Innes, chief global market strategist at Axi.

The dollar held on to gains supported by investor worries about the looming US election, while Asian markets rose on optimism about a vaccine and US aid.

Adding to uncertainties of a global economic recovery was the worldwide coronavirus cases rising by more than 400,000 for the first time on Friday, a record one-day increase as much of Europe enacts new restrictions to curb the outbreak.

Silver fell 0.1% to $24.15 per ounce, while platinum rose 0.6% to $865.22 and palladium was up 0.5% at $2,342.53.

Reuters