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Money News

Gold gains on weaker dollar, virus woes ahead of US election

(Reuters) - Gold firmed above $1,900 an ounce on Friday, en route to a weekly gain, as the dollar weakened and as investors hedged against uncertainties surrounding the coronavirus pandemic and going into the Nov. 3 U.S. presidential election.

FILE PHOTO: A gold bar is pictured on display at Korea Gold Exchange in Seoul, South Korea, August 6, 2020. REUTERS/Kim Hong-Ji/File photo

Spot gold rose 0.3% to $1,909.10 per ounce by 0946 GMT and was up 0.5% for the week. U.S. gold futures gained 0.4% to $1,912.

“Gold is getting some boost from the dollar weakening and we have the U.S. elections and there’s still a lot of uncertainty. Also, there are talks about the U.S. stimulus package in negotiation,” said Bank of China International analyst Xiao Fu.

The dollar index fell 0.2% against its rivals, making dollar-denominated gold less expensive for holders of other currencies.

House Speaker Nancy Pelosi on Thursday reported progress in talks with the Trump administration for another round of fiscal aid and a deal could be reached “pretty soon”.

Even once the U.S. election results were known, “there still could be uncertainty about policies and implementation running until the end of the year, in turn supporting gold”, Bank of China International’s Fu said.

There could also be additional inflows into gold exchange traded funds - often a gauge of investor sentiment - on renewed uncertainties over pandemic-related restrictions and the U.S. election outcome, UBS analysts said in a note.

The final debate between U.S. President Donald Trump and his Democratic challenger Joe Biden included contrasting views on the pandemic.

Countries across Europe implemented fresh restrictions as coronavirus cases more than doubled over the last 10 days, while the global tally touched about 41,178,000.

Silver fell 0.2% to $24.70 per ounce, but was set for a weekly rise. Platinum rose 0.2% to $886.50 and palladium was flat at $2,372.99.

(Corrects date of election in first paragraph)

Reporting by Asha Sistla in Bengaluru; Editing by Alex Richardson

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