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Money News

Gold slips on strong dollar, U.S. stimulus doubts

(Reuters) - Gold fell below the key psychological level of $1,900 on Monday to its lowest in more than a week, pressured by a firmer dollar and stalled progress in talks for a new U.S. coronavirus aid package.

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 fell 0.2% to $1,897.71 per ounce by 0908 GMT, after hitting $1,890.19, its lowest since Oct. 15.

U.S. gold futures fell 0.3% to $1,900.50.

“There seems to be a lack of impetus to find extra buyers (for gold)... A lot of it is because we’re trading in the looming shadow of the U.S. elections and stimulus speculation,” said IG Markets analyst Kyle Rodda.

The dollar rose 0.3% against a basket of other currencies.

U.S. House Speaker Nancy Pelosi on Sunday said the Trump administration was reviewing the latest plan for more COVID-19 relief and that she expected a response on Monday.

But with the presidential elections fast approaching, analysts said a victory for Democrat rival Joe Biden could help gold rally on a potential large stimulus package, especially amid COVID-19 cases surging in the United States.

France registered a record increase in infections over the weekend and Spain announced a state of emergency as cases surged through Europe.

Widely viewed as a hedge against inflation and currency debasement, bullion has gained 25.1% this year as central banks and governments unveiled unprecedented stimulus to cushion the economic fallout from the pandemic.

A break below support at $1,887 per ounce could push gold lower to $1,872, according to Reuters technical analyst Wang Tao.

Elsewhere, auto-catalyst metals palladium and platinum dropped 1.5% to $2,356.16 and 1.4% to $888.59 respectively.

“Although supply shocks for the pair have eased in recent weeks, Chinese car sales continue to eclipse expectations, which paints a bullish picture into the year end and should keep prices buoyant,” MKS PAMP said in a note.

Silver fell 1.9% to $24.12 per ounce.

Reporting by Eileen Soreng in Bengaluru; Editing by Richard Chang and Rashmi Aich

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