Gold steadies at US$1,900 as US stimulus hopes support

[BENGALURU] A firmer US dollar held back gold near the US$1,900 per ounce psychological level on Monday even as US House Speaker Nancy Pelosi raised hopes for a coronavirus relief package before the presidential election.

Spot gold was up 0.1 per cent at US$1,900.79 per ounce by 3.45am GMT, while US gold futures were down 0.2 per cent at US$1,903.40.

"We expect gold to trade cautiously around US$1,900 level for now, the game changer being whether we can get (US) fiscal stimulus in the next 48 hours," said Howie Lee, an economist at OCBC Bank.

Mrs Pelosi said on Sunday that differences remained with the Trump administration on a wide-ranging coronavirus relief package but that she was optimistic legislation could be pushed through before Election Day.

However, Mrs Pelosi acknowledged an agreement would have to come within 48 hours for that to happen.

Gold, widely viewed as a hedge against inflation and currency debasement, has risen about 25 per cent this year as governments and central banks unleashed a wave of stimulus measures to limit economic damage from the pandemic.

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"The bigger buyers are going to remain buyers on the dips because gold is going to hold its value because of all the stimulus coming," said Stephen Innes, chief global market strategist at Axi.

The US dollar held on to gains supported by investor worries about the looming US election, while Asian markets rose on optimism around a vaccine and US aid.

Adding to uncertainties of a global economic recovery was the worldwide coronavirus cases rising by more than 400,000 for the first time on Friday, a record one-day increase as much of Europe enacts new restrictions to curb the outbreak.

Silver fell 0.1 per cent to US$24.15 per ounce, while platinum rose 0.6 per cent to US$865.22 and palladium was up 0.5 per cent at US$2,342.53.

REUTERS