Gold Drops As Equities Rebound; Trump-Biden Debate Eyed
Gold eased on Monday as positive economic data from China boosted risksentiment, dimming the safehaven metal's allure, ahead of the first presidential election debate between U.S. President Donald Trump and Democratic rival Joe Biden.
- Last Updated: September 28, 2020, 17:14 IST
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Gold eased on Monday as positive economic data from China boosted risk-sentiment, dimming the safe-haven metal’s allure, ahead of the first presidential election debate between U.S. President Donald Trump and Democratic rival Joe Biden.
Spot gold fell 0.1% to $1,858.55 per ounce by 1110 GMT. U.S. gold futures were down 0.3% to $1,861.10.
“As China’s ongoing economic recovery boosts risk sentiment and uplifts investor confidence, appetite towards gold may drop in the short term despite the negative list of factors at play,” said FXTM analyst Lukman Otunuga.
Data over the weekend showed profits at China’s industrial firms grew for the fourth straight month in August, giving a boost to equity markets.
Bullion, however, failed to take advantage of a softer dollar, that retreated from a two-month high hit on Friday.
An appreciating dollar has the potential to drag gold prices towards $1,820 – $1,800, though gold remains supported by political uncertainty and rising coronavirus cases in the medium to longer term, FXTM’s Otunuga said.
Markets are now awaiting the first presidential election debate between Trump and Biden on Tuesday.
“If we do have a draw and no one particularly putting in a strong performance, then the market will continue to be left with a great deal of uncertainty,” potentially benefiting gold, said Saxo Bank analyst Ole Hansen.
Investors are also keeping an eye on developments over a new coronavirus relief package after U.S. House Speaker Nancy Pelosi said on Sunday a deal could be reached with the White House and talks were continuing.
Elsewhere, silver rose 0.4% to $22.94 per ounce, platinum gained 1.8% to $862.34 and palladium was up 0.3% at $2,222.12.
“Once gold stabilizes and we get a sense that we’ve seen the worst in terms of a correction (in silver), then silver is likely to come flying back,” Saxo Bank’s Hansen added.
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