Gold eased on Friday and looked set to post its first weekly drop in three, as the dollar held firm while additional U.S. fiscal stimulus appeared unlikely before the presidential election.
Spot gold fell 0.2% to $1,903.24 per ounce by 0631 GMT, losing 1.4% so far this week. U.S. gold futures dipped 0.1% to $1,907.50.
“There’s some further upside for the dollar and that’s been a major headwind for gold, in addition to the ongoing (U.S.) stimulus negotiations which have yielded no progress,” said Edward Moya, senior market analyst at OANDA.
“Everyone is settling on the likelihood that we’re not going to have a deal before the election.”
U.S. President Donald Trump said on Thursday he was willing to raise his offer of $1.8 trillion for a relief deal with Democrats in Congress, but the idea was shot down by Senate Majority Leader Mitch McConnell.
The dollar , also considered a safe haven, was headed for its first weekly gain in three, supported by surging coronavirus cases globally and fading bets for a U.S. stimulus deal.
The COVID-19 pandemic has prompted unprecedented money printing and low interest rates globally, putting gold on track for its best year in a decade given its appeal as a hedge against inflation and currency debasement.
Gold may retest support at $1,896 per ounce, a break below which could cause a fall to $1,877, according to Reuters technical analyst Wang Tao.
Elsewhere, silver fell 0.8% to $24.11 per ounce, and was down 3.9% for the week.
“Silver prices fell back on concern that industrial metals demand in Europe will take a hit after some of the region’s biggest cities imposed fresh lockdown measures,” Avtar Sandu, senior commodities manager at Phillip Futures, said in a note.
Platinum fell 0.4% to $860.22 and palladium eased 0.1% to $2,350.45.
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