Gold prices declined, reversing most of its previous session gains, as investors awaited key takeaways from the first U.S. presidential debate, while optimism over hopes of a U.S. coronavirus aid deal limited losses.
Spot gold was trading 0.7 percent down at $1,884.01 per ounce by 0936 GMT, having hit a high of $1899.18 earlier, its highest since September 23. U.S. gold futures were down 0.8 percent at $1,888.95.
Traders assessed a fierce first debate between Republican President Donald Trump and Democratic rival Joe Biden. The two White House contenders battled fiercely over Trump’s leadership on the coronavirus pandemic, the economy and the integrity of November’s election in a chaotic first debate on Tuesday.
The dollar index rebounded from a 1-week low against its rival currencies, boosted by better-than-expected U.S. economic data and hopes of additional fiscal stimulus to cushion the coronavirus blow.
U.S. consumer confidence rebounded more than expected in September as households’ views of the labour market improved. On Tuesday, U.S. House Speaker Nancy Pelosi said she hoped to have a coronavirus aid deal with the White House this week, after speaking with Treasury Secretary Steve Mnuchin.
The dollar also gained support from New York Federal Reserve President John Williams comments, citing the U.S. recovery from the coronavirus-linked recession has been more robust than expected, though he added it could be about three years before the economy regains its full strength.
The safe-haven metal's recovery was also dented by upbeat Chinese data showing China’s factory activity expanded at a faster pace in September. The official manufacturing Purchasing Manager’s Index rose to 51.5 in September from 51.0 in August.
The greenback against a basket of currencies traded 0.3 percent up at 94.14, having touched a low of 93.79 earlier, its lowest since September 22. The U.S. Treasury yields declined, with the benchmark 10-year note yield trading at 0.648 percent and the 2-year yield at 0.125 percent.
Investor now await U.S. ADP employment change figures, gross domestic product, personal consumption expenditures prices, Chicago purchasing managers index, pending home sales and Fed official speech for signs of recovery in the economy and further insights over the monetary policy outlook.
