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PRECIOUS-Gold holds tight range on caution over U.S. aid

Published 20/10/2020, 03:06 pm
© Reuters.
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* Gold could test $1,932/oz if stimulus is passed- analyst

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

By Eileen Soreng

Oct 20 (Reuters) - Gold traded on Tuesday in a narrow range above $1,900 an ounce as caution spread ahead of a deadline for agreement on a new U.S. coronavirus stimulus package and next month's presidential election.

Spot gold XAU= fell 0.2% to $1,900.71 per ounce by 0757 GMT. U.S. gold futures GCv1 were down 0.4% to $1,903.30.

"Sentiment surrounding bullion remains tentative, keeping spot gold around the $1,900-mark, as some...continue to hold out hope that Democrats and the White House can arrive at a deal over the immediate term," said FXTM market analyst Han Tan.

"Bullion may continue moderating as such hopes wane, when realisation sinks in that a fresh round of U.S. fiscal stimulus is likelier to be a post-election event."

U.S. House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin "continued to narrow their differences" about the package, her spokesman Drew Hammill said. hopes that by the end of Tuesday there will be "clarity" on whether a stimulus bill can be passed before the Nov. 3 election, he wrote on Twitter.

Gold is considered a hedge against inflation and currency debasement amid the unprecedented levels of global stimulus to ease the economic blow from the pandemic.

"A lot of investors are on the sidelines and also in particular because the (U.S.) elections are coming up," said Brian Lan, managing director at GoldSilver Central, adding that a stimulus would make bullion prices test the higher end of the $1,882-$1,932 range.

Investors are now waiting for the final debate between U.S. President Donald Trump and his Democratic challenger Joe Biden on Thursday.

The dollar index .DXY was flat versus rivals, while Asian stocks slipped as investors adjusted risk exposure heading into the election. USD/ MKTS/GLOB

Elsewhere, silver XAG= fell 0.5% to $24.37 per ounce and platinum XPT= dipped 0.4% to $852.81, while palladium XPD= rose 0.2% to $2,348.83.

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