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PRECIOUS-Gold holds steady as focus turns to U.S. stimulus, election

Published 20/10/2020, 08:48 pm
© Reuters.
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* Gold investors awaiting new market drivers -analyst

* Gold has risen nearly 26% this year

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

By Brijesh Patel

Oct 20 (Reuters) - Gold prices were stable on Tuesday, hovering above $1,900, as investors awaited indications whether a new U.S. coronavirus stimulus package will be forthcoming before next month's presidential election.

Spot gold XAU= was steady at $1,904.26 an ounce at 1154 GMT. U.S. gold futures GCcv1 eased 0.3% to $1,906.80.

The dollar index .DXY slipped 0.2% against its rivals, lending support to gold by making the metal less expensive for holders of other currencies.

"Investors' focus is on the new aid package for the U.S. economy, whether it will be successfully placed before the election," said Commerzbank (DE:CBKG) analyst Eugen Weinberg.

"The U.S. election is itself very important. The market is also (evaluating the) chances of each candidate and its impact on monetary policy going forward."

U.S. House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin "continued to narrow their differences" on the stimulas package, Pelosi's spokesman Drew Hammill said. which has risen nearly 26% this year, tends to benefit from widespread stimulus from central banks because the metal is viewed as a hedge against inflation and currency debasement.

"In the last few days there hasn't been much volatility on bullion as investors are awaiting new market drivers," ActivTrades' chief analyst, Carlo Alberto De Casa, said in a note.

"Only a clear climb above $1,930 would give new strength to the price," he said, adding that, while the bull trend seems to have paused, "it is definitely not yet dead".

Meanwhile, France reported a massive jump in the number of people hospitalised with COVID-19 and Ireland announced some of Europe's toughest restrictions to combat the virus. other precious metals, silver XAG= edged 0.1% higher to $24.51 an ounce, platinum XPT= rose 0.3% to $859.10 and palladium XPD= was up 0.1% at $2,345.94.

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