Gold slips from three-week high as dollar ticks up
By Brijesh Patel
(Reuters) - Gold slid from a three-week high on Monday as the dollar recovered somewhat, but the prospect of more spending on U.S. coronavirus aid and uncertainty surrounding next month's presidential election sent prices down.
Spot gold fell 0.2% to $ 1,925.56 an ounce at 1213 GMT after hitting its highest level since September 21 at $ 1,932.96 at the start of the session.
The US gold futures rose 0.2% to $ 1,931.50.
"We have seen a slight recovery in the dollar," said Michael Hewson, chief market analyst for CMC Markets UK.
"I still think we need to buy the dip as ultimately the prospect of further stimulus after the US election will help support gold prices," he added.
The dollar index rose 0.1%, crawling off a three-week low in the previous session. A stronger dollar tends to weigh on gold by making it more expensive for holders of other currencies.
Gold, which is up over 27% so far this year, tends to benefit from economic spending as it is viewed as a hedge against inflation risks and currency weakening. It is also in demand in times of heightened market uncertainty.
The Trump administration on Sunday called on Congress to pass a stripped-down coronavirus relief bill with leftover funds as negotiations on a broader package stalled ahead of the November 3 presidential election.
"We are in a wait and see scenario as investors try to understand what will happen to the US elections in early November and the subsequent reaction in both the equity and currency markets," said Carlo Alberto De Casa, chief analyst at ActivTrades Note.
"Technically, gold is gaining strength again. The consolidation above 1,920 USD is a supportive signal for gold bars and confirms the great interest shown by traders."
Elsewhere, silver rose 0.3% to $ 25.19 an ounce, palladium rose 0.3% to $ 2,445.89, while platinum was down 0.2% to $ 884.35.
(Reporting by Brijesh Patel in Bengaluru; editing by Jan Harvey and Pravin Char)
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