Gold prices rose on Friday, as the dollar retreated, supported by worries of soaring coronavirus cases in the United States and Europe as well as uncertainty over the upcoming U.S. presidential election.
Spot gold rose 0.5% to $1,875.76 per ounce by 357 GMT, but was on track for a third straight month of declines. U.S. gold futures were up 0.5% at $1,877.
The dollar index fell 0.2% against a basket of currencies, making bullion cheaper for holders of other currencies. “The dollar rebound appears to have run its course,” said Edward Moya, senior market analyst at OANDA. “The virus spread is going to provide additional pressure on the Congress to deliver more support… That’s just going to bolster the stimulus trade going forward.” The White House virus task force warned aggressive steps will be needed to curb the outbreak, with the U.S. breaking its single-day record for new infections on Thursday.
Europe has moved back to the centre of the global pandemic, with Germany and France ordering a second lockdown to curb the spread of infections.
“Leading into the U.S. elections I see it (gold) staying weak,” said Michael Langford, executive director at corporate advisory and consultancy firm AirGuide. “Regardless of whoever wins the election, there is going to be some form of stimulus program and that’s positive for gold.” Gold is up nearly 24% this year as unprecedented stimulus measures globally boosted the precious metal’s appeal as a hedge against inflation and currency debasement.
The U.S. presidential election is set for Nov. 3 and opinion polls show Democrat contender Joe Biden with a significant edge nationally, but with a tighter lead in the battleground states that play a decisive role in the final result.
Silver climbed 1% to $23.51 per ounce. Platinum and palladium were up 1% at $855.77 and $2,213.71, respectively.