Gold Trims Monthly Loss With Dollar Steady Ahead of U.S. Vote
(Bloomberg) -- Gold advanced, trimming its monthly loss, as the dollar stabilized in the final days before next week’s pivotal U.S. presidential election.
Uncertainty remains high before the Nov. 3 vote, lifting the dollar’s appeal as a safe asset over bullion while a resurgence in coronavirus cases rips through the U.S. and Europe. The spread of Covid-19 is intensifying in the U.S., where new cases topped 86,000 to set a fresh daily record. In Europe, countries have begun to impose new restrictions in an effort to stem the crisis.
Bullion is poised for a third consecutive monthly drop -- the longest run of declines since April 2019 -- with investors favoring the dollar as a haven. With Covid-19 concerns rising and the U.S. presidential election next week, gold and silver “will be highly volatile,” James Steel, chief precious metals analyst at HSBC Securities (USA) Inc., said in a note.
“Increases in risk-off sentiment tend to buoy USD, which weakens gold and silver,” Steel said. “But we think this will only go so far.”
Spot gold gained 0.6% $1,878.73 an ounce at 1:49 p.m. New York time, on track for a small decline this month. Gold for Dec. delivery rose 0.6% to settle at $1,879.90 an ounce. Silver increased 1.4%, while palladium advanced and platinum fell.
Since hitting a record in August, gold’s advance has faltered, with prices losing momentum amid gains for the dollar. Holdings in exchange-traded funds backed by bullion remain close to an all-time high. The Bloomberg Dollar Spot Index was on track for a 1.3% rise this week.
Gold “is really so closely tied to the dollar right now that it has no life of its own,” said Janet Mirasola, managing director at Sucden Futures.
Over the longer term, gold will be supported by European Central Bank monetary policy that probably will include economic stimulus, according to Commerzbank AG analyst Daniel Briesemann.
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