Gold slips as dollar firms after Trump, Biden face off

Gold dipped on Wednesday as the dollar ticked up after Republican President Donald Trump and Democratic rival Joe Biden sparred in the first US presidential debate ahead of the November 3 election.

Spot gold fell 0.5 per cent to $1,889.66 per ounce by 0357 GMT, after hitting a one-week high of $1,899.12 earlier in the session. Spot gold was on track to post it worst monthly fall since November 2016, dropping four per cent so far this month.

US gold futures were down 0.4 per cent at $1,895.40. The dollar index was 0.1 per cent higher against rivals and was heading for its biggest monthly rise since July 2019.

"The US dollar is still dominating the gold price movement... The debate didn't give us too much of surprises," said Margaret Yang, a strategist with DailyFx, which covers currency, commodity and index trading.

The debate in Cleveland turned chaotic as the US presidential candidates faced off over Trump's leadership on the Covid-19 pandemic, the economy and taxes. Also taking some shine off gold was upbeat Chinese data on manufacturing and services activity that beat analysts' expectations and bolstered the economic recovery.

Investors are tracking the progress of a new US coronavirus relief bill after US House Speaker Nancy Pelosi said she hoped for a deal this week with the White House, following talks with Treasury Secretary Steve Mnuchin.

Gold, seen as a hedge against inflation and currency depreciation, has gained about 25 per cent so far this year, supported by monetary stimulus from major central banks and governments.

"Gold has entered into a temporary consolidation phase but this may be a short-term correction in a long-term bull run, as we move towards a second US fiscal stimulus," Yang added. Silver slipped 1.1 per cent to $23.91 per ounce, platinum fell 0.9 per cent, to $876.27 and palladium was up 0.4 per cent to $2,318.35.