LONDON: Gold steadied on Wednesday, as a chaotic first US presidential debate drove investors to the safety of the dollar and raised concerns over the next stimulus bill, leading the metal towards its worst month in over two years.
Spot gold was steady at $1,897.86 per ounce by 11:17 am EDT (1512 GMT), declining 3.5% so far in September, which could be its worst monthly performance since June 2018.
US gold futures fell 0.3 % to $1,897.30.
“It seems like after last night’s debate, a wedge might have formed between the two parties again and a possibility for any kind of stimulus may have diminished,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
The first US presidential debate President Donald Trump and Democratic rival Joe Biden turned investors cautious and drove them to seek refuge in the dollar, reducing gold’s appeal for other currency holders.
The dollar index was set for its best month since July 2019.
“Whenever the dollar index rallies, we see a deflationary environment and that weighs on not only the prices of gold but also silver and a lot of other commodities,” Streible added.
Despite the recent pullback, most analysts see an upward trajectory for gold in the medium to long term. The metal is on track for its eighth straight quarterly gain.
“The good thing for gold is, with more uncertainty, more people want to own gold, and in addition to that, it looks like some of the policies may continue, like the low and negative interest rates across the globe,” Michael Matousek, head trader at US Global Investors said.
Silver fell 1% to $23.94 per ounce and platinum rose 1.8% to $900.29.
Silver was on track for its first monthly contraction since March, falling 14.9% and platinum was set to report its biggest fall since March, declining 3%.
Palladium rose 1.7% to $2,346.92 per ounce and was up 4.6% for the month.
Comments
Comments are closed for this article.