Gold prices edged higher on Tuesday, helped by a weaker dollar and worries over a second surge in coronavirus cases, while investors held back from making large bets ahead of next week’s U.S. presidential election.
Spot gold was up 0.2% at $1,906.10 per ounce at 10:21 a.m. EST (1421GMT). U.S. gold futures rose 0.2% to $1909.40.
The dollar index slipped 0.2% against its rivals, making gold less expensive for holders of other currencies.
“People are worried about the coronavirus … global economies are slowing down, so they’re trying to stimulate (the economy), that is generally supportive for gold,” said Michael Matousek, head trader at U.S. Global Investors.
“But, gold is stuck in a tight range and there’s probably not going to be too much activity before the election,” he added.
The United States, Russia, France and many other countries are setting records for coronavirus infections, forcing some countries to impose new curbs.
Meanwhile, negotiations over a new U.S. relief package remain in limbo with House Speaker Nancy Pelosi expressing hope that an agreement can be reached before the Nov. 3 presidential election.
Democratic challenger Joe Biden leads President Donald Trump in national polls but the race is much tighter in battleground states which determine the election outcome.
“Gold’s outlook will remain very bullish if Election Day delivers a ‘blue wave’ that signals massive stimulus on coronavirus relief and infrastructure spending,” Edward Moya, senior market analyst at OANDA, said in a note.
Gold, considered a hedge against inflation and currency debasement, has jumped 26% this year amid unprecedented global levels of stimulus during the pandemic.
Elsewhere, palladium eased 0.3% to $2,344.79 per ounce, while platinum rose 1% to $877.62.
Palladium could test $2,600 by mid-2021 bolstered by market tightness and stimulus measures, UBS said in a note.
Silver was flat at $24.31 per ounce.
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