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PRECIOUS-Gold gains as stimulus uncertainty eases; market awaits Fed minutes

Published 08/10/2020, 01:52 am
Updated 08/10/2020, 05:18 am
© Reuters.
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* Fed's Sept. 15-16 policy meeting minutes due at 1800 GMT

* Potential of no election result in Nov will help gold -analyst

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

By Arundhati Sarkar

Oct 7 (Reuters) - Gold rose on Wednesday after concerns over further U.S. stimulus to support the virus-hit economy eased and the focus shifted to upcoming minutes from the U.S. Federal Reserve's last meeting for clues on the outlook of monetary policy.

Spot gold XAU= rose 0.5% to $1,887.05 per ounce by 1:45 pm EDT (1745 GMT). U.S. gold futures GCv1 settled down 0.9% at $1,890.80.

U.S. President Donald Trump on Tuesday announced a halt in additional stimulus negotiations until after the Nov. 3 presidential election, prompting gold prices to drop nearly 2%. He later suggested new payroll assistance to U.S. passenger airlines. Trump's retracement from 'no stimulus negotiation' to 'unilateral relief measures' has helped support gold prices despite the U.S. dollar only weakening slightly," said Jeff Klearman, portfolio manager at GraniteShares.

"Coronavirus-related demand destruction concerns still abound, meaning sooner or later, a fiscal stimulus package will likely be passed and the Fed will continue its unprecedented accommodative monetary policy," Klearman said.

Investors now await minutes from Fed's Sept. 15-16 policy meeting at 1800 GMT. Fed Chair Jerome Powell on Tuesday called for more help for businesses and households to keep a nascent economic recovery from faltering. is an anticipation about the level of inflation as a result of stimulus ... and that could be hedged by gold," said Jeffrey Sica, president and chief investment officer of Sica Wealth Management.

"There will be a great potential of not having an election result in November, which will help gold prices as a flight to safety," he added.

Gold retains value even at times of financial or political uncertainty. It is also used as a hedge against inflation.

Silver XAG= climbed 3% to $23.78 per ounce, platinum XPT= gained 1.8% to $863.18, and palladium XPD= rose 0.8% to $2,358.82.

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