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PRECIOUS-Gold hits 1-week high ahead of key U.S presidential debate

Published 29/09/2020, 10:50 pm
© Reuters.
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* Dollar index .DXY slips 0.2%

* Market awaits Trump- Biden debate at 2100 ET (0100 GMT)

* Platinum undervalued and has room for further upside- analyst

* Interactive graphic tracking global spread of coronavirus: https://graphics.reuters.com/world-coronavirus-tracker-and-maps/ (Recasts, adds comments, updates prices)

By Nakul Iyer

Sept 29 (Reuters) - Gold steadied on Tuesday, having earlier its highest in almost a week as the dollar retreated, while investors waited for the first U.S. presidential debate and further developments on a new U.S. coronavirus relief bill.

Having risen as high as $1,889.86, spot gold XAU= was little changed at $1,880.11 per ounce by 1239 GMT, while U.S. gold futures GCv1 rose 0.4% to $1,889.50 per ounce.

A slight inflow into gold-backed ETF holdings supports the view that gold is again back in demand as a safe haven after the fall from the highs to last week's low, said Quantitative Commodity Research analyst Peter Fertig. GOL/ETF

While a weaker dollar and continued monetary stimulus could push gold above $1,900 again, whether it can test new highs this year will depend on political and economic developments in the U.S. and if that triggers safe-haven demand, he added.

The dollar was down 0.2% against a basket of other major currencies .DXY ahead of the 90-minute televised debate between President Donald Trump and democratic rival, Joe Biden at 2100 ET (0100 GMT). USD/

"The possibility of Biden doing well might exert upward pressure on gold because it might prompt the dollar to sell-off," said Michael Hewson, chief market analyst at CMC Markets UK.

"If Biden does well, its a dollar negative simply because he is less business friendly."

Investors are also keeping close tabs on the prospect for a fiscal coronavirus package with Democratic lawmakers in U.S. House of Representatives unveiling a $2.2 trillion relief bill, although no date was given for a vote on the proposal. silver XAG= rose 0.3% to $23.78 per ounce, platinum XPT= rose 0.1% to $880.17, while palladium XPD= gained 0.8% to $2,273.12.

Platinum is undervalued and there's further room to rise even versus gold with a price differential of roughly $1,000, an unexpected supply deficit and record investment demand likely, Commerzbank (DE:CBKG) analyst Carsten Fritsch said.

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