Gold prices dipped on Thursday as the dollar steadied and comments from U.S. Treasury Secretary Steve Mnuchin dashed hopes of a new fiscal stimulus package before the presidential election.
Spot gold fell 0.2% to $1,896.26 per ounce by 0320 GMT, after rising as much as 1.1% in the previous session. U.S. gold futures were down 0.4% to $1,899.
“The (gold) market is still treading water waiting for further clarity on what stimulus package may be needed in the U.S.,” said Cameron Alexander, manager of precious metals research at Refinitiv Metals Research. “Gold will rise once the details of a possible stimulus package become available, but that may not happen for a while.”
Mnuchin said he and House of Representatives Speaker Nancy Pelosi were “far apart” on another coronavirus economic relief package, and that a deal would be hard to reach before the Nov. 3 election. The dollar index was up 0.1% against rivals, drawing support from rising coronavirus cases and scant progress towards the stimulus deal.
Gold, considered a hedge against inflation and currency debasement, has climbed 25% this year amid the unprecedented levels of global stimulus to ease the economic blow from the pandemic.
“Gold should resume its longer-term rally after the election into the end of the year,” said Jeffrey Halley, a senior market analyst at OANDA, adding the metal was likely to trade between $1,880 and $1,920 in the near-term.
Fuelling further concerns about an economic recovery, some European nations are closing schools, cancelling surgery and enlisting student medics as COVID-19 cases surge.
Silver fell 0.9% to $24.07 per ounce, platinum was flat at $857.04, and palladium eased 0.2% to $2,340.06.