Weaker dollar limits gold’s decline

Bengaluru — Gold prices dipped on Tuesday, as equities gained after US President Donald Trump was discharged from hospital after treatment for a coronavirus infection, though a softer dollar limited losses.

Spot gold fell 0.1% to $1,911.22 an ounce by 3.34am GMT. Prices hit $1,918.36 on Monday, a peak since September 22. US gold futures were down 0.2% at $1,915.90.

The market is still in a risk-on mood and that is tempering gold, said Stephen Innes, chief market strategist at AxiCorp. “There’s a bit of uncertainty kicking in mostly over President Trump’s recovery and on what that’s going to do to polling numbers,” he said.

Asian stock markets rose to a two-week high after the US president returned to the White House from hospital after treatment for Covid-19 and on rising prospects for a fresh US stimulus package.

However, the severity of Trump’s illness has been the subject of intense speculation. US House speaker Nancy Pelosi and treasury secretary Steven Mnuchin were preparing to continue talks on the new coronavirus relief package again on Tuesday.

Gold was also weighed down by mild profit-booking, analysts said.

Meanwhile, a weaker dollar and progress on fresh stimulus talks limited gold’s decline. The dollar index was down 0.1% against rivals making gold cheaper for holders of other currency.

“Given that the US dollar index is falling, this is likely to support gold prices and cushion the downside,” said Margaret Yang, a strategist with DailyFx, which covers currency, commodity and index trading. “Overall trend (in gold) has turned bullish … $1,910 will be a critical support level at the moment.”

Among other precious metals, silver rose 0.1% to $24.37 an ounce, palladium eased 0.2% to $2,357.77, while platinum was steady at $897.27.

Reuters