Gold inches lower on caution over US coronavirus aid

[BENGALURU] Gold prices eased on Tuesday, trading in narrow a range, as caution set in ahead of the deadline to reach an agreement on a new US coronavirus stimulus package and the upcoming presidential election.

Spot gold fell 0.2 per cent to US$1,901.16 per ounce by 3.35am GMT. US gold futures were down 0.3 per cent at US$1,905.20.

"A lot of investors are on the sidelines and also in particular because the (US) elections are coming up," Brian Lan, managing director at GoldSilver Central said, adding that a stimulus will make prices test the higher end of the US$1,882-US$1,932 range.

US House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin "continued to narrow their differences" about a fresh aid package in a telephone conversation, her spokesperson Drew Hammill said.

Mrs Pelosi hopes that by the end of Tuesday there will be "clarity" on whether a coronavirus stimulus bill can be passed before the Nov 3 elections, he wrote on Twitter.

A massive stimulus from the Democrats could revive precious metals trading as they have been losing their mojo without additional stimulus, Avtar Sandu, a senior commodities manager at Phillip Futures, said in a note.

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Gold is considered a hedge against inflation and currency debasement amid the unprecedented levels of global stimulus to ease the economic blow from the pandemic.

Investors now eye the final debate between US President Donald Trump and his Democratic challenger Joe Biden on Thursday to see if it shifts the trajectory of the election.

The US dollar index was flat against its rivals, while Asian stocks slipped as investors adjusted risk exposure heading into the US election.

Elsewhere, silver fell 0.1 per cent to US$24.47 per ounce, platinum was steady at US$856.71 and palladium rose 0.1 per cent to US$2,345.43.

REUTERS