Gold steadies as election uncertainty offsets higher dollar, equities
By Arundhati Sarkar
(Reuters) - Gold stabilized on Thursday as uncertainty surrounding the U.S. presidential election and bets that new stimulus would drive inflation would offset downward pressure on gold bars with a higher dollar and an improved appetite for riskier assets.
Spot gold was barely changed at $ 1,889.21 per ounce until 11:18 a.m. EDT (1518 GMT), bobbing back and forth between positive and negative territory. The US gold futures rose 0.2% to $ 1,893.70.
While risk appetite "is growing pretty fast" and a higher dollar weighs in too, gold continues to support inflation expectations, said Bart Melek, director of commodities strategies at TD Securities.
"We're not saying there will be an inflation problem immediately, but the concern is that if the policy continues and is repeated after the elections, we will likely see both a lower dollar and lower real interest rates, which are likely to get lower." ""
Global stocks were aiming for a monthly high as hopes of further impetus offset the rising number of coronavirus cases and lockdowns in Europe, thereby limiting the progress of gold bars.
A higher dollar also kept gold in check.
That year, however, gold was still up 24%, boosted by unprecedented government and central bank incentives to revive economies around the world, as it is viewed as a hedge against inflation and a safe haven from economic and political uncertainties.
"It will go (gold) higher, it will be volatile. That will be for the next election month, it will be for the two months after the election," said Jeffrey Christian, managing partner of CPM Group.
Among other things, silver rose 0.3% to $ 23.92 an ounce. Platinum was up 0.3% to $ 866.95 an ounce, while palladium was 0.9% higher to $ 2,373.21.
(Reporting by Arundhati Sarkar in Bengaluru; editing by Chris Reese)
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