Gold futures on Monday inching slightly higher, holding at around three-week peak, despite gains on equities and a stronger U.S. dollar, which had been a drag on the commodity last week.
Bullion trading continues to be inspired by uncertainty around the U.S. presidential election between President Donald Trump and Democratic challenger and former Vice President Joe Biden, about three weeks away.
Fear of a contested election, although seemingly diminishing as Biden’s lead in national polls has widened, has been a big source of concern for investors hedging that the election loser may not quickly concede defeat.
Worries that results may not come out quickly due to measures to limit the spread of the spread of coronavirus also have raised some anxieties.
“Technically gold is regaining strength with the consolidation above $1,920 a supportive signal for bullion and confirming traders’ huge interest,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades, in a Monday note.
Some investors say that gold has remained buoyant despite the rise in stocks due to the prospects of higher deficits, which would result from Congress passing an additional coronavirus aid package.
Hope for stimulus has inspired equities, viewed as additional support for a rally that has shown some signs of flagging amid fears that a lack of a fresh boost to the economy would lead to a deterioration in the rebound from the worst pandemic in recent memory.
Marios Hadjikyriacos, investment analyst at XM said that a “weaker greenback and massive government deficits are a magical elixir for gold, which stormed back above the $1900 region.”
was trading $4.30, or 0.2%, at $1,930.10, after the most-active contract ended Friday with a roughly 1% weekly gain, according to FactSet data.
Silver for December delivery
meanwhile, was gaining 19 cents, or 0.8%, at $25.31 an ounce, after gold’s sister metal registered a weekly advance of 4.5% last week.
On Monday, the dollar was edging higher, up 0.2% at 93.22, as gauged by the ICE U.S. Dollar Index
a measure of the dollar against a half-dozen currencies. A stronger buck tends to drive overseas investors away from gold because the commodity is seen at those times as relatively more expensive using foreign currencies.
Meanwhile, stocks globally headed mostly higher as uncertainty surrounding the election results ebbed with polls showing a growing lead for Biden over President Trump.