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PRECIOUS-Gold eases on buoyant dollar as U.S. stimulus bets fade

Published 15/10/2020, 03:02 pm
© Reuters.
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* Gold to trade in the range of $1,880-$1,920/oz in near-term - analyst

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)

By Eileen Soreng

Oct 15 (Reuters) - Gold edged lower on Thursday as the dollar gained after U.S. Treasury Secretary Steve Mnuchin dashed hopes for a new fiscal stimulus package before the presidential election.

Spot gold XAU= fell 0.1% to $1,899.57 per ounce by 740 GMT, after rising as much as 1.2% on Wednesday.

U.S. gold futures GCv1 were down 0.2% to $1,903.90 per ounce.

"The (gold) market is still treading water waiting for further clarity on what stimulus package may be needed in the United States," 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's said he and democrat lawmakers were "far apart" on a coronavirus economic relief package, and that a deal would be hard to reach before the Nov. 3 election, prompting investors to seek the safety of the dollar. USD/ dollar is still regarded as a safe haven and is holding gold prices down, Refinitiv's Alexander added.

Gold, considered a hedge against inflation and currency debasement, has climbed 25% this year amid 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 that 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. XAG= fell 0.7% to $24.10 per ounce and platinum XPT= slipped 0.1% to $855.93, while palladium XPD= rose 0.2% to $2,349.98.

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