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Gold slips from 3-wk high on prospect of limited U.S. stimulus

Published 13/10/2020, 01:27 am
© Reuters.
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* U.S. government, bond market closed for Columbus Day

* Trump administration calls for stripped-down relief bill

* Interactive graphic tracking global spread of coronavirus: https://graphics.reuters.com/world-coronavirus-tracker-and-maps/ (Updates prices)

By Sumita Layek

Oct 12 (Reuters) - Gold prices fell from a three-week peak on Monday as expectations of an inadequate U.S. coronavirus relief bill dented the appeal of bullion, which is used as a hedge against likely inflation.

Spot gold XAU= fell 0.3% to $1,923.56 per ounce by 1:41 p.m. EDT (1741 GMT), after hitting its highest since Sept. 21 at $1,932.96. U.S. gold futures GCv1 settled up 0.1% at $1,928.90.

The Trump administration on Sunday called on Congress to pass a stripped-down coronavirus relief bill using leftover funds, as negotiations on a broader package ran into resistance. are talking trillions (in stimulus) one day and it's billions the next day and it will (probably) be millions next. It feels like it is getting smaller coming into the election," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

The possibility of a smaller U.S. coronavirus stimulus bill is weighing on gold, he added.

Gold has gained over 26% so far this year helped by stimulus from governments and global central banks as it considered a hedge against inflation risks and currency weakening.

Investors were also keeping a close eye on the upcoming U.S. election due in a couple of weeks, where Democrat Joe Biden is seen as more likely to win. will be higher if Biden wins because he will spend a lot of money," said Bob Haberkorn, senior market strategist at RJO Futures, adding any unknowns on the election night will also provide support.

Bullion also eased as Wall Street's main indexes were supported by rising tech stocks. .N

The U.S. government and bond market are closed on Monday for Columbus Day.

Among other precious metals, silver XAG= fell 0.2% to $25.07 per ounce, platinum XPT= fell 1.3% to $874.22, while palladium XPD= lost 1.6% to $2,399.86.

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