Finance

Gold rises on renewed US stimulus hope, dollar falls

Gold

Spot gold rose 0.3 percent to $1,910.56 an ounce at 3:37pm, New York time, after falling as much as 0.5 percent.

Gold rose on renewed optimism for a preelection aid package in the U.S., while the dollar fell to a one-week low.

House Speaker Nancy Pelosi said a bill for a compromise stimulus package is being written as she awaits a key phone call with Treasury Secretary Steven Mnuchin. Senate Majority Leader Mitch McConnell said his chamber would take up a comprehensive coronavirus package if an accord is struck. The Bloomberg Dollar Spot Index headed for the third straight decline.

Pelosi said in a Bloomberg Television interview that while there are areas where more work is required to get a compromise, she was pleased with the Trump administration’s latest position on coronavirus testing and tracing. The two sides are also “in range” on other health care provisions, she said.

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“The market will no doubt follow the talks in Washington very closely,” Commerzbank analyst Daniel Briesemann said in a note. “Gold could profit in the event of a deal because the U.S. dollar would presumably be in less demand then and would probably depreciate.”

Spot gold rose 0.3% to $1,910.56 an ounce at 3:37 p.m. New York time after falling as much as 0.5%. Gold futures for December delivery on the Comex rose 0.2% to settle at $1,915.40.

The dollar index dropped as much as 0.4% to the lowest since Oct. 13.

Spot silver climbed 1.5%, while platinum and palladium gained.

The passing of Tuesday’s deadline may have a short-term impact on gold, but “overall the market looks a bit stale, with the outcome and the impact of the U.S. election being an even bigger headache,” according to Ole Hansen, head of commodity strategy at Saxo Bank A/S.

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The price of the metal held in a narrow range this month amid the fraught Washington talks with investors waiting on the result of the election to provide direction. A Democrat victory should spur a rally for gold on bets for a larger stimulus for the economy, Phillip Futures Pte. said Tuesday in a note.

Talks between Britain and the European Union over a post-Brexit trade deal are mired in a stalemate after a call between the two sides’ chief negotiators concluded without a breakthrough.

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