Gold advanced on Friday, trimming its monthly loss, as the US dollar stabilized in the final days before Tuesday’s pivotal US presidential election.
Uncertainty remains high before the vote, lifting the US dollar’s appeal as a safe asset over bullion, while a resurgence in COVID-19 cases rips through the US and Europe.
The spread of COVID-19 is intensifying in the US, where new cases topped 86,000 to set a fresh daily record.
In Europe, countries have begun to impose new restrictions in an effort to stem the crisis.
Bullion posted a third consecutive monthly drop — the longest run of declines since April last year — with investors favoring the US dollar as a haven.
With COVID-19 concerns rising and the US presidential election on Tuesday, gold and silver “will be highly volatile,” HSBC Securities (USA) Inc chief precious metals analyst James Steel said in a note.
“Increases in risk-off sentiment tend to buoy USD, which weakens gold and silver,” Steel said. “But we think this will only go so far.”
Spot gold on Friday gained about 0.6 percent to US$1,878.87 an ounce, falling 1.7 percent for the month. For the week, it was down 1.1 percent.
Gold for December delivery on Friday rose 0.6 percent to settle at US$1,879.90 an ounce.
Silver increased 1.4 percent, while palladium advanced and platinum fell.
Since hitting a record in August, gold’s advance has faltered, with prices losing momentum amid gains for the US dollar.
Holdings in exchange-traded funds backed by bullion remain close to an all-time high.
The Bloomberg Dollar Spot Index posted a 1.3 percent rise this week.
Gold “is really so closely tied to the dollar right now that it has no life of its own,” Sucden Futures Inc managing director Janet Mirasola said.
Over the longer term, gold would be supported by European Central Bank monetary policy that probably would include economic stimulus, Commerzbank AG analyst Daniel Briesemann said.
Additional reporting by staff writer
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