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PRECIOUS-Gold edges up as second-wave fears counter firm dollar

Published 26/10/2020, 10:13 pm
© Reuters.
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* Rise in Asian physical demand to further support gold - analyst

* Chinese car sales to buoy platinum, palladium - analysts

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

By Asha Sistla

Oct 26 (Reuters) - Gold edged up on Monday as growing fears over a second COVID-19 wave countered a firmer dollar and a lack of headway on a U.S. stimulus package to combat the economic impact of the pandemic.

Spot gold XAU= was 0.1% higher at $1,902.06 per ounce by 1221 GMT, regaining some ground after earlier falling to its lowest since Oct. 15, at $1,890.19.

U.S. gold futures GCcv1 were flat at $1,904.30.

"What's significant is the fact that yes, we have opened lower, but we're actually pulling off the lows of the day. There was always this possibility that we were going to get a second (COVID-19) wave, and obviously that is a concern," said Michael Hewson, chief market analyst at CMC Markets UK.

"It's still unlikely that we're going to get a fiscal stimulus out of the U.S. this year now," Hewson added.

Gold, considered a hedge against inflation, currency debasement and broader macroeconomic uncertainties, has gained 25% this year, driven mainly by unprecedented global stimulus measures to cushion against the coronavirus-induced slump.

The dollar index .DXY rose 0.3%, denting appetite for gold among those holding other currencies. USD/

U.S. House Speaker Nancy Pelosi on Sunday said the Trump administration was reviewing the latest plan for more COVID-19 relief and she expected a response on Monday. Market's Hewson said there was a "prevailing sense of deja vu with markets" reacting to the repeat of the first lockdown as European leaders warned of difficult months ahead over a resurgent pandemic. improvement in Asian physical demand could provide further support to gold, said Commerzbank (DE:CBKG) analyst Daniel Briesemann. GOL/AS

Elsewhere, auto-catalyst metal palladium XPD= fell 0.8% to $2,373.64 while platinum XPT= shed 2.6% to $878.10.

Chinese car sales data "paints a bullish picture into the year-end and should keep prices buoyant," MKS PAMP said in a note.

Silver XAG= dipped 1.7% to $24.17 per ounce.

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