Gold steady as Covid-19, US elections uncertainty looms

Gold steady as coronavirus, US elections uncertainty loom

Spot gold was steady as $1,906.15 per ounce by 0329 GMT. US gold futures were down 0.3% at $1,907.10

Representative Image. Credit: Reuters Photo

Gold prices were little changed on Wednesday, staying above the $1,900-mark, as uncertainties about US elections and surging global Covid-19 cases countered pressure from a firmer dollar and fading hopes of an immediate US stimulus package.

Spot gold was steady as $1,906.15 per ounce by 0329 GMT. US gold futures were down 0.3% at $1,907.10.

"Investors need a reason to buy more gold and the reason to buy gold will come from a policy signal," said Stephen Innes, chief global market strategist at Axi.

"With the virus raging all over, we are going to get stimulus at some point... This is also probably leaning towards more central bank intervention because the economic hit is going to be quite significant," he added.

The pandemic has prompted unprecedented money printing and low-interest rates globally, putting gold on track for its best year in a decade given its appeal as a hedge against inflation and currency debasement.

Meanwhile, markets were disappointed after US President Donald Trump acknowledged that a coronavirus economic relief deal would likely come after the Nov. 3 election.

The dollar index was up 0.2% against rivals, with the US elections' uncertainty adding to the "risk off" tone. Worries about the virus' spread continued, with the United States, Russia, France and other countries seeing record new infections recently. European governments introduced new curbs to rein the fresh outbreaks.

On the technical front, spot gold may test a support at $1,887, as the bounce triggered by this support is ending around a resistance at $1,912, according to Reuters technical analyst Wang Tao. Silver fell 0.9% to $24.33 per ounce, platinum rose 0.1% to $880, while palladium rose 0.8% to $2,348.81.