SINGAPORE: Gold edged lower in Asian trade on Tuesday as the dollar rebounded, although the metal is likely to be supported going forward due to an eventual US stimulus package that will boost its appeal as a hedge against the resultant inflation. Spot gold inched 0.1% lower to $1,919.76 per ounce by 0813 GMT.
US gold futures were down 0.3% at $1,922.70 per ounce. "In the absence of further dollar downside, gold bulls are feeling a little jittery at the moment," said Howie Lee, an economist at OCBC Bank.
"Over the near or longer term, there is a boost for gold prices if it is (stimulus) passed. But because we're stuck in a deadlock now and it increasingly looks like there'll be none before the elections, gold is struggling a bit here."
Investors also kept close tabs on the upcoming US elections with polls showing Democrat rival Joe Biden leading the race. "A so-called 'blue wave' would likely pave the way for a larger fiscal support package, which in turn could exert more upward pressure on bullion," said FXTM market analyst Han Tan.
"A protracted delay to the US elections outcome could also spur risk aversion in the interim, which could buffer the supportive environment for gold," Tan said, adding, however, that the risk of a higher dollar and yields remained a headwind.
Comments
Comments are closed for this article.