Gold prices rose again on Tuesday, reaching its highest in almost a week, as investors await the first US presidential debate and further developments on a new coronavirus relief bill.
Spot gold advanced 0.8% to $1,896.80 per ounce by 2 p.m. EDT, having briefly touched the $1,900 per ounce mark earlier in the session. US gold futures also gained 1.1%, trading at $1,903.40 per ounce on the Comex in New York.
“A slight inflow into gold-backed ETF holdings supports the view that gold is again back in demand as a safe haven after the fall from the highs to last week’s low,” Quantitative Commodity Research analyst Peter Fertig said in a Reuters interview.
“While a weaker dollar and continued monetary stimulus could push gold above $1,900 again, whether it can test new highs this year will depend on political and economic developments in the US and if that triggers safe-haven demand,” he added.
Meanwhile, the US dollar was down 0.4% against a basket of other major currencies ahead of Tuesday’s debate between President Donald Trump and Democratic rival Joe Biden.
“The possibility of Biden doing well might exert upward pressure on gold because it might prompt the dollar to sell-off,” Michael Hewson, chief market analyst at CMC Markets UK, explained.
“If Biden does well, its a dollar negative simply because he is less business friendly.”
Michael Hewson, chief market analyst at CMC Markets UK
Investors are also keeping close tabs on the prospect for a fiscal coronavirus package with Democratic lawmakers unveiling a $2.2 trillion relief bill on Monday evening, though no date was given for a vote on the proposal.
(With files from Reuters)