Gold gains as concerns over U.S. stimulus talks ease

Gold rebounded on Wednesday as worries about a halt in U.S. coronavirus stimulus talks faded, bolstering bullion’s appeal as a hedge against inflation and prompting investors to cover short positions after a near 2% decline in the last session. Spot gold rose 0.5% to $1,886.16 per ounce at 1142 GMT. U.S. gold futures fell 1% to $1,889.60.

Gold fell nearly 2% on Tuesday after U.S. President Donald Trump halted negotiations for an additional stimulus package until after the Nov. 3 election. However, he later suggested new payroll assistance to U.S. passenger airlines. “There has been some short covering which has revived the market off the lows.

Gold is finding its way back to the $1,900s, it’s less a case of whether there is going to be a stimulus package and more of the timing,” said independent analyst Ross Norman.

“The Democratic leader has a significant lead (in the election polls) and the markets are turning to what would that entail, certainly the suggestion is the Democrats, if they were to be successful, will be pushing through a significantly larger stimulus package,” Norman said.

Gold, seen as a hedge against inflation and currency debasement, has risen 24% this year, supported by massive government and central bank stimulus worldwide.

“Overall, it’s the reaction in the bond markets, the yields are lower, the U.S. dollar is a bit weaker against the euro,” said Quantitative Commodity Research analyst Peter Fertig. Fertig added the uncertainty from the upcoming U.S. elections would keep gold supported.

Investors now await minutes from U.S. Federal Reserve’s Sept. 15-16 policy meeting due later in the day.They also took stock of stringent guidelines for experimental coronavirus vaccines released by the U.S. FDA, delaying the availability of vaccine until after the election. Elsewhere, silver climbed 1.8% to $23.50 per ounce, platinum gained 1.3% to $859.44, while palladium rose 0.5% to $2,352.74.

(Reporting by Sumita Layek in Bengaluru; Editing by Mark Potter and Louise Heavens)

Reuters – October 7, 2020 – by Sumita Layek

Original Story Here

Related Post


Learn How A Precious Metals IRA Can Secure Your Retirement

The precious metals market may seem intimidating, but it’s not as it seems. Our team has compiled a summary of our tips and information into a free guide so you can learn how to begin securing your future.


We Will Guide You Every Step Of The Way


By clicking the button above, you agree to our Privacy Policy and Terms of Service and authorize Oxford Gold or someone acting on its behalf to contact you by text message, ringless voicemail, or on a recorded line at any telephone or mobile number you provide using automated telephone technology, including auto-dialers, for marketing purposes. No purchase required. Message and data rates may apply. You also agree to receive e-mail marketing from Oxford Gold, our affiliated companies, and third-party advertisers. To opt-out at any time click here or reply STOP to opt-out of text messages.