Gold was steady on Tuesday while the dollar weakened due to traders’ improved appetite for riskier assets. U.S. President Donald Trump has already left the hospital where he was being treated for COVID-19, alleviating some of the investors’ fears.
Spot gold changed insignificantly at $1,912.81 per ounce after hitting its highest point since Sept. 22 on Monday at $1,918.36. U.S. gold futures lowered by 0.1% to $1,918.50.
FXTM market analyst Han Tan stated that the greenback’s refusal to explore more of its downside is taking some of the shine of gold. According to him, while news of Trump’s improving condition had initially encouraged a risk-on sentiment, it could be short-lived. Questions continue to swirl about the true state of the U.S. President’s health.
As a result, the dollar tumbled down by 0.1% against a basket of major currencies. That made gold cheaper for holders of other currencies. However, stock markets neared a more than two-week high worldwide after Trump returned to the White House. Expectations of new COVID-19 economic relief measures in the United States also boosted investor’s optimism.
How Did Other Commodity Metals Trade?
Silver lowered by 0.2% to $24.31 per ounce, while palladium plummeted down by 0.7% to $2,346.62. Platinum also plunged by 1.6% to $882.62.
Tan thinks that if the next round of U.S. fiscal stimulus gets approval, that may lend upward pressure to the U.S. inflation outlook, as well as encouraging gold bulls to return to the fore.
Investors see gold as a hedge against inflation and currency debasement. Thus, it has surged forward by 26% this year. Massive government and central bank stimulus supported gold worldwide.
Commerzbank analyst Carsten Fritsch stated that the main risk for the commodity is the upcoming U.S. elections. If the election is close and Joe Biden has the lead, and Trump does not concede, the country will enter a prolonged uncertainty period. However, that means dovish news for the dollar and bullish news for gold.