You are here: Home » Markets » Commodities » commodity gold
Business Standard

Gold dips on dollar bounce as investors see US election race tighten

Gold fell as the dollar strengthened after US President Donald Trump grabbed an early lead in the key state of Florida

Topics
2020 US elections | US Elections | Donald Trump

Reuters 

Photo: Reuters
Gold bricks

By Nakul Iyer and Eileen Soreng

(Reuters) - Gold fell on Wednesday as the dollar strengthened after U.S. President grabbed an early lead in the key state of Florida, muddying the path for his Democratic rival

Spot gold fell 0.6% to $1,896.44 per ounce by 0358 GMT, having earlier shed as much as 1%.

U.S. gold futures fell 0.7% to $1,897.10.

"The market is losing confidence in a clear run to a Biden victory at the moment ... We have seen the Biden trade unwind and a big effect of that is that we have seen the dollar strengthen," said IG analyst Kyle Rodda.

Trump was leading Biden in the vital battleground state of Florida on Tuesday, while other competitive swing states that will help decide the election, including North Carolina, remained up in the air.

Investors were initially limbering up for a win for Biden, who was expected to inject the market with potentially large stimulus measures to help weather the economic fallout from the COVID-19 pandemic.

"I think the odds of a clean sweep are diminishing, almost by the minute. That reduces the possibility, or the likelihood at least, of a large stimulus program being agreed to in the first days of a Biden administration," said Matt Sherwood, head of investment strategy at Perpetual in Sydney.

Gold has gained about 25% so far this year on the back of unprecedented global stimulus amid the COVID-19 pandemic since bullion is considered an inflation hedge.

The dollar was up 0.7% against a basket of major currencies.

"Gold has faded ahead of resistance at $1,912 and is suffering as it appears Trump will hold the key swing state of Florida," said Jeffrey Halley, senior market analyst at OANDA, predicting a "choppy $1,890 to $1,920 range" in the morning session.

Silver fell 1.6% to $23.77. Platinum dropped 0.9% to $858.77 and palladium was down 0.4% at $2,274.83.

 

 

(Reporting by Nakul Iyer and Eileen Soreng in Bengaluru; additional reporting by Tom Westbrook in Singapore; Editing by Krishna Chandra Eluri and Devika Syamnath)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, November 04 2020. 11:04 IST
RECOMMENDED FOR YOU
.