Gold slips on US dollar rebound, investors eye US stimulus

[BENGALURU] Gold prices fell on Tuesday with a slight rebound in US dollar, while investors clung to hopes of a US stimulus package being eventually released.

Spot gold dipped 0.6 per cent to US$1,910.76 per ounce by 3.46am GMT.

US gold futures were down 0.3 per cent to US$1,923.

"There is a rebound in the dollar index. In the absence of further dollar downside, gold bulls are feeling a little jittery at the moment," said Howie Lee, an economist at OCBC Bank.

The dollar index was up 0.1 per cent against rivals, while Asian shares were weaker.

On investors radar was also a new US coronavirus relief bill after a White House spokesperson said on Monday that Senate Republicans will go along with what President Donald Trump wants in legislation.

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Mr Trump on Sunday called on Congress to pass a stripped-down bill, as negotiations on a broader package continued to run into roadblocks.

"If the stimulus is passed that will naturally send gold prices higher... Increasingly it looks like there will be none before the presidential elections hence we see gold struggling a bit here," Mr Lee added.

Massive stimulus measures to limit the economic damage from the Covid-19 pandemic has supported gold, widely viewed as a hedge against inflation and currency debasement. Prices have gained about 26 per cent so far this year.

Meanwhile, adding to the uncertainty over the economic recovery was a recent spike in coronavirus cases across major economies, including the US and the UK, with worldwide infections crossing 37.68 million.

Silver fell 1.5 per cent to US$24.73 per ounce, platinum eased 0.4 per cent to US$869.63 per ounce, and palladium dipped 0.13 per cent to US$2,398.54.

REUTERS