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PRECIOUS-Gold steady as coronavirus, U.S. election uncertainties loom

Published 28/10/2020, 02:54 pm
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* Spot gold may test support at $1,887/oz - technicals

* Interactive graphic tracking global spread of coronavirus: https://tmsnrt.rs/3mvcUoa (Adds comment, updates prices)

By Eileen Soreng

Oct 28 (Reuters) - Gold prices steadied above the $1,900 mark on Wednesday as uncertainties about the U.S. elections and surging global COVID-19 cases countered pressure from a firmer dollar and fading hopes of an immediate U.S. stimulus package.

Spot gold XAU= was little changed at $1,909.20 per ounce by 0619 GMT. U.S. gold futures GCv1 were flat at $1,911.60.

"Investors need a reason to buy more gold and the reason to buy gold will come from a policy signal," said Stephen Innes, chief global market strategist at Axi.

"With the virus raging all over, we are going to get stimulus at some point... This is also probably leaning towards more central bank intervention because the economic hit is going to be quite significant," he added.

Unprecedented money printing and low interest rates globally has set gold on pace for its best year in a decade, given its appeal as a hedge against inflation and currency debasement. Bullion is up nearly 26% this year.

As a fresh wave of coronavirus infections spread, European governments moved to impose new curbs and provide economic help to businesses to weather the pandemic. a damper on sentiment, President Donald Trump said that a coronavirus economic relief deal would likely come after the Nov. 3 election. dollar .DXY , also viewed as a safe-haven asset, rose 0.2% against a basket of major currencies, benefiting from the U.S. election uncertainty. USD/ MKTS/GLOB

"Gold prices are being kept in check by the dollar index... Gold's adherence to a tight range also indicates that some investors remain sceptical over the prospects of a 'blue wave'," said FXTM market analyst Han Tan. the technical front, spot gold may test a support at $1,887, as the bounce triggered by this support is ending around a resistance at $1,912, according to Reuters technical analyst Wang Tao. XAG= was steady at $24.52 per ounce, platinum XPT= rose 0.6% to $884, while palladium XPD= gained 0.9% at $2,351.

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