Gold eases as greenback holds firm amid U.S. election concerns
Gold prices declined after surging by more than 2 percent in the previous session, as the dollar gained, but was set for its best week since late July on hopes for more central bank economic support as investors bet on a divided U.S. Congress under a Biden presidency.
Spot gold fell 0.5 percent to $1,939.71 per ounce by 0719 GMT, having hit a high of $1952.78 on Thursday, its highest since September 21. The safe-haven metal soared 2.4 percent the prior session on a dollar slide, setting it up for a 3.1 percent gain for the week. U.S. gold futures fell 0.3 percent to $1,940.45.
The dollar steadied as Biden edged closer to victory but votes were still being counted in key states and Republican incumbent Donald Trump escalated efforts to cast doubt on the election’s integrity. Moreover, prospects of a divided Congress dimmed chances for immediate stimulus, driving expectations the Fed might need to fill the gap.
Investors expect Democrat Joe Biden to beat President Donald Trump and the Republicans to retain control of the Senate, allowing them to block the Democrats’ agenda.
On Thursday, the Federal Reserve kept its loose monetary policy intact and pledged again to do whatever it can in coming months to sustain a U.S. economic recovery amid a coronavirus pandemic and uncertainty over a still-undecided presidential election.
With COVID-19 raging in the United States and parts of Europe, many investors assume more monetary stimulus will be inevitable. Investors also focus on the stalled talks on a U.S. coronavirus relief package.
The greenback against a basket of currencies traded 0.1 percent up at 92.60, having touched a low of 92.48 on Thursday, its lowest since October 21. The U.S. Treasury yields rose, with the benchmark 10-year note yield trading at 0.771 percent and the 30-year yield at 1.536 percent.
Markets also await U.S. nonfarm payrolls due later in the day, which is likely to have increased by 600,000 jobs in October after rising 661,000 in September.