Gold Up from Weak Dollar, Weekly Performance Still Lukewarm

Gold Up from Weak Dollar, Weekly Performance Still Lukewarm

Gold edged up in Asia, attempting to erase the one-month low recorded during the previous session.

The weak dollar bolsters the precious metal as the US elections near. The greenback retraced slightly in the latest trading session but is set to end the week with overall gains.

There is a growing risk sentiment in the market. Investors are fleeing towards the protection of safe-haven assets for temporary refuge.

Any hope left for the passing of the next stimulus package is gone after last Thursday.

White House chief economic adviser Larry Kudlow asserted that any attempt to reach concessions before November 3 will have to wait for now.

Spot gold remains largely unchanged at $1,865.54 per ounce.

Hold futures, however, recorded a 0.35% hike at $1,874.55 an ounce, still below the psychological threshold of $1,900.

Other metals followed suit. Silver increased by 0.2%, while platinum and palladium added 0.5% and 0.6%, respectively.

Elsewhere, in Asia, the discounted Chinese gold to international exchanges is expected to narrow in the coming quarter.

According to analysts, they have spotted apparent reductions in the gap during the past quarter. This may further shrink as local demand recovery stabilizes better.

Adding on, steady economic recovery with no looming second wave of infections in sight may support the transition towards the fourth quarter.

The discount is largely due to the dramatic slowing of demand during the early onset of the pandemic in the first and second quarters.

Stronger Dollar and a Weak Gold

The bullion may be ending the week with a hike and the dollar with a slump; among the two safe-haven assets, the latter made the most rally during the week.

The precious metal lost 1.1% so far in the month, as charts do not consolidate a bullish pattern on sight yet.

In reverse, the US dollar index is due to end the week with an optimistic tine after steadying to a three-week high.

Analysts noted that the US election jitters combined with surging numbers of coronavirus cases globally might support traders’ demand for the greenback.

In turn, this will create bearish prospects intact for the bullion.

The yellow metal will test the September low, which was at $1,849 per ounce. This comes after breaching the 100-day DMA during the week.

Investors are currently keeping a bird’s eye view on the coming November 3 elections in the world’s most powerful economy.

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