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Gold Steady As Weaker Dollar Offsets Buoyant Equities

Gold Steady As Weaker Dollar Offsets Buoyant Equities

Gold held steady on Tuesday as a weaker dollar countered improved appetite for riskier assets after U.S. President Donald Trump left the hospital where he was being treated for COVID19.

Gold held steady on Tuesday as a weaker dollar countered improved appetite for riskier assets after U.S. President Donald Trump left the hospital where he was being treated for COVID-19.

Spot gold was little changed at $1,912.81 per ounce by 0946 GMT, having hit its highest since Sept. 22 on Monday at $1,918.36.

U.S. gold futures eased 0.1% to $1,918.50.

“The dollar’s refusal to explore more of its downside is taking some of the shine off gold,” FXTM market analyst Han Tan said.

He added that while news of Trump’s improving condition had initially encouraged a risk-on sentiment, it could be short lived, with questions continuing to swirl about the true state of the President’s health.

The dollar fell 0.1% against a basket of major currencies, making gold cheaper for holders of other currencies.

Global stock markets neared a more than two-week high after Trump returned to the White House, and on expectations of new coronavirus economic relief measures in the United States.

“Should the next round of U.S. fiscal stimulus be approved, that may lend upward pressure to the U.S. inflation outlook while encouraging gold bulls to return to the fore,” Tan said.

Gold, seen as a hedge against inflation and currency debasement, has risen 26% this year supported by massive government and central bank stimulus worldwide.

“The main risk is the upcoming U.S. elections, if the election is close and Joe Biden has the lead and Trump does not concede, then we will enter a prolonged period of uncertainty,” Commerzbank analyst Carsten Fritsch said.

“And that will be dovish news for dollar and bullish news for gold.”

Elsewhere, silver eased 0.2% to $24.31 per ounce, palladium fell 0.7% to $2,346.62, while platinum shed 1.6% to $882.62.

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