Gold Firms As Dollar Stalls, Uncertainties Loom Ahead Of U.S. Polls

Gold inched up on Thursday after a sharp slide in the previous session as a halt in the dollar’s rally supported some safe- haven buying driven by surging coronavirus cases and the approaching U.S. elections.

Spot gold rose 0.1% to $1,879.71 per ounce by 0805 GMT, with some investors also taking advantage of Wednesday’s slide to a one-month low to buy gold. U.S. gold futures were up 0.1% at $1,880.10.

The U.S. elections and expectation of a pause in the dollar index are propping up gold, said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade.

Also, “in giant economies like France and Germany, COVID-19 cases are increasing and again they are going for lockdowns. So in that situation, there should be some safe-haven buying for gold.”

Ahead of the Nov. 3 election, Democratic challenger Joe Biden leads U.S. President Donald Trump nationally, but the competition is tighter in swing states.

“The broad supportive band (for gold) through $1,870-$1,880 remains intact for the time-being… Key near-term drivers remain U.S. equity flows and dollar direction,” MKS PAMP said in a note.

Concerns over the pace of the global economic recovery have also gripped markets in recent days, as European countries impose new lockdowns to contain a new coronavirus wave.

The dollar index rally took a breather as it steadied off a one-week peak scaled on Wednesday. [USD/]

Investors are now focussing on central bank meetings, with the European Central Bank expected to hold off on new measures later in the day and hinting at action in December.

Gold, considered an inflation-hedge, has gained 24% this year, helped by near-zero interest rates globally and unprecedented stimulus measures to ease the economic blow from the pandemic.

Silver fell 0.6% to $23.28 per ounce, while platinum rose 0.3% to $870.02. Palladium was up 0.5% at $2,247.76.

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