Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

PRECIOUS-Gold gains as focus returns to pandemic, U.S. election

Published 14/10/2020, 02:55 pm
© Reuters.
XAU/USD
-
XAG/USD
-
GC
-
SI
-
PA
-
PL
-

* Gold's broader $1,850-$1,940 range intact- analyst

* Equities hit by halted vaccine trials, stimulus talks impasse

* Interactive graphic tracking global spread of coronavirus: https://graphics.reuters.com/world-coronavirus-tracker-and-maps/ (Updates prices)

By Eileen Soreng

Oct 14 (Reuters) - Gold firmed on Wednesday as uncertainties over a global economic recovery and the U.S. presidential election prompted investors to exploit a sharp pullback in the previous session to buy bullion.

Spot gold XAU= rose 0.2% to $1,895.16 per ounce by 0729 GMT, after shedding as much as 1.9% on Tuesday on the dollar's jump. U.S. gold futures GCv1 gained 0.2% to $1,897.30.

"Whenever there is a price drop, there's a section of strategic investors who think gold is still a very good hedge against global uncertainties... So they keep coming in," said Harshal Barot, a senior research consultant for South Asia at Metals Focus.

With the COVID-19 pandemic showing no signs of slowing and uncertainty over U.S fiscal stimulus, the broader $1,850-$1,940 range remains intact, he added.

News that key COVID-19 vaccine trials were paused, along with an impasse in U.S. stimulus talks, soured appetite for riskier assets while propping up the dollar, capping gold's gains. MKTS/GLOB USD/

Analysts said fading hopes for a U.S. coronavirus aid package, especially before the presidential election, after House Speaker Nancy Pelosi rejected a $1.8 trillion proposal from the White House, could also limit bullion's gains. the near term, the dollar could continue to rise both because of risk aversion because stimulus seems to be stuck and also because of (company) earnings forward guidance," said DailyFx currency strategist Ilya Spivak

But gold's appeal as a hedge against likely inflation and currency debasement from unprecedented money printing globally due to the pandemic has seen bullion prices rise about 25% so far this year.

"The broader case for gold" is still supportive, with the global economic slowdown likely to last much longer prompting lower interest rates, said Metals Focus' Barot.

Silver XAG= fell 0.1% to $24.14 per ounce, while platinum XPT= rose 0.9% to $872.77 and palladium XPD= gained 1.8% to $2,357.17.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.