Gold prices ease as dollar steadies on U.S. stimulus concerns

Gold prices declined from a more than 1-week high hit in the previous session as the dollar recovered some lost ground after doubts emerged whether an agreement on a new U.S. fiscal coronavirus aid package could be reached before the election.

Spot gold slumped 0.4 percent to $1,917.39 per ounce by 1024 GMT, having hit a high of $1931.40 on Wednesday, its highest since October 12. U.S. gold futures were down 0.5 percent to $1,919.90 per ounce.

Stimulus talks between U.S. lawmakers faced a setback on Wednesday when President Donald Trump accused Democrats of being unwilling to craft an acceptable compromise on fresh stimulus, despite reports of some progress earlier in the day.

The dollar index steadied against its rival currencies, having tumbled to a near a 2-month low in the prior session on hopes that an agreement on stimulus was close.  But prospects remain dim for the Republican-controlled Senate to approve any aid before the Nov. 3 election.

House Speaker Nancy Pelosi said before starting talks with Treasury Secretary Steven Mnuchin that there was still a chance for a deal despite resistance from Senate Republicans, though she acknowledged it might not pass until after the election.

Highlighting the need for additional fiscal support, U.S. Federal Reserve Governor Lael Brainard said the economic recovery is uneven and uncertain and will require continued support to ensure it becomes broad-based and sustainable.

The greenback against a basket of currencies traded 0.2 percent up at 92.80, having touched a low of 92.47 on Wednesday, its lowest since September 2. The U.S. Treasury yields eased, with the benchmark 10-year note yield trading at 0.813 percent and the 30-year yield at 1.616 percent.

Investors now turn their attention to the final U.S. presidential debate between Trump and Democrat rival Joe Biden, and weekly U.S. jobless claims due later in the day.