Gold futures ended higher on Monday to eke out their fifth gain in six sessions, finding support as global equities fell in response to rising COVID-19 cases in the U.S. and Europe.
A stronger U.S. currency, meanwhile, served to limit gains for the dollar-denominated yellow metal.
Gold prices edged higher for the session as U.S. equity markets headed sharply lower and data showed new home sales declined (link) in September, said Jeff Wright, executive vice president of GoldMining Inc. If not for strength in the U.S. dollar, gold would be much higher, he told MarketWatch.
Wright said he sees some safe haven interest as the U.S. presidential election approaches as uncertainty surrounds the outcome. He expects “gold to catch a bigger bid and interest if this continues” through the week.
Gold for December delivery (ABX.T) tacked on 50 cents, a rise of less than 0.1%, to settle at $1,905.70 an ounce on Comex. The most-active contract had posted gains each day last week, with the exception of Thursday.
December silver lost 25 cents, or 1%, at $24.42 an ounce.
U.S. benchmark stock indexes fell sharply Monday (link), with pressure attributed in part to a continued surge in COVID-19 cases, with the number of new U.S. infections hitting a daily record on Friday and European countries imposing tougher restrictions on activity.
Long-running talks toward a new round of aid spending from Washington, meanwhile, have yet to bear fruit.
U.S. stimulus talks on another coronavirus relief plan “limp along and the markets are now more concerned with the election outcome given that even if, as [House Speaker] Nancy Pelosi suggests, the deal could get through the House, Senate approval is highly unlikely before the election,” Rhona O’Connell, head of market analysis for EMEA and Asia at StoneX, wrote in a Monday newsletter.
Meanwhile, the ICE U.S. Dollar Index , a measure of the currency against a basket of six major rivals, was up 0.3%. A stronger dollar can be a weight on commodities priced in the greenback, making them more expensive to users of other currencies.
In other metals trading, prices for copper eased back after tapping their highest finish in over two years (link) last week. December copper shed 1.3% to $3.0895 a pound.
January platinum declined by 3.2% to $877.40 an ounce and December palladium settled at $2,368.70 an ounce, down nearly 1.3%.