Gold Drops as Investors Weigh Stimulus Prospects, Virus Cases
(Bloomberg) -- Gold declined to trade near $1,900 an ounce as investors weighed fading prospects for a U.S. stimulus deal, while the country reported record coronavirus infections for the second day in a row.
House Speaker Nancy Pelosi said the chamber could pass a plan this week, though a deal with the White House remains elusive and the Republican-led Senate might not act before the election. Speculation about a package has helped Treasury yields rise in recent weeks, dulling bullion’s allure.
“Gold is facing a bit of a headwind from the recent slight rise in real yields,” said Nicholas Frappell, global general manager at Sydney-based ABC Bullion. “Some investors are optimistic over the prospects for U.S. growth. Others are seeing positioning ahead of a Democratic win and assuming that the fiscal consequences will drive bond prices lower and yields higher.”
Spot gold dropped as much as 0.6% to $1,891.38 an ounce, and was at $1,898.03 at 6:31 a.m. in London, down for a third day. Silver fell 1.7%, platinum lost 1.7% and palladium declined 0.9%. The Bloomberg Dollar Spot Index rose 0.2%. Real yields on 10-year Treasuries ticked lower after surging last week.
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