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PRECIOUS-Gold set for worst month in nearly 4 years on dollar bounce-back

Published 01/10/2020, 01:37 am
Updated 01/10/2020, 04:42 am
© Reuters.
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* Gold down about 4% this month

* Silver faces biggest monthly decline in 9 years

* Platinum on track for worst month since March (Updates prices)

By Arundhati Sarkar

Sept 30 (Reuters) - Gold edged down on Wednesday, as a chaotic first U.S. presidential debate drove investors to the safety of the dollar and raised concerns over the next stimulus bill, leading the metal towards its worst month in nearly four years.

Spot gold XAU= was 0.3% lower at $1,892.33 per ounce by 2:17 pm EDT (1817 GMT) and down about 4% in September, on track for its worst monthly performance since Nov. 2016.

U.S. gold futures GCv1 settled down 0.4% at $1,895.50.

"It seems like after last night's debate, a wedge might have formed between the two parties again and a possibility for any kind of stimulus may have diminished," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

The first U.S. presidential debate between President Donald Trump and Democratic rival Joe Biden turned investors cautious and drove them to seek refuge in the dollar, reducing gold's appeal for other currency holders. dollar index .DXY was set for its best month since July 2019. USD/

"Whenever the dollar index rallies, we see a deflationary environment and that weighs on not only the prices of gold but also silver and a lot of other commodities," Streible added.

Despite the recent pullback, most analysts see an upward trajectory for gold in the medium to long term. The metal is on track for its eighth straight quarterly gain.

"The good thing for gold is, with more uncertainty, more people want to own gold, and in addition to that, it looks like some of the policies may continue, like the low and negative interest rates across the globe," Michael Matousek, head trader at U.S. Global Investors said.

Silver XAG= fell 3% to $23.55 per ounce and platinum XPT= rose 1.3% to $895.99.

Silver was on track for its worst month since September 2011, down about 17% so far this month, while platinum was set for its biggest fall since March, declining over 3%.

Palladium XPD= was steady at $2,309.20.

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