Gold prices fell to pare biggest weekly gain since July as investors await US election results

After holding in a narrow range for most of October, gold broke out on Thursday as uncertainty over the election results and renewed stimulus hopes amid a worsening pandemic boosted demand for the haven asset.

Gold fell to trim the biggest weekly gain since July as investors awaited the final outcome of the U.S. election, weighed prospects for further stimulus, and tracked shifts in the dollar after it hit a 30-month low.

A gold bar is pictured on display at Korea Gold Exchange in Seoul, South Korea. (REUTERS)

President Donald Trump questioned the credibility of the election, complaining polls had overstated Joe Biden’s lead in many battleground states, and the count of mail-in votes was eroding his lead in Pennsylvania and Georgia. Biden strengthened his hold on the race on Thursday, expressing confidence in a win.

After holding in a narrow range for most of October, gold broke out on Thursday as uncertainty over the election results and renewed stimulus hopes amid a worsening pandemic boosted demand for the haven asset. Federal Reserve Chair Jerome Powell opened the door to a possible shift in the central bank’s bond purchases in coming months, saying that more fiscal and monetary support are needed.

“Trump’s comments renewed some concerns with regards to political uncertainties, which saw the dollar rise to weigh on gold,” said Jingyi Pan, a market strategist at IG Asia Pte. Still, the outlook remains positive for gold on lingering U.S. political uncertainties and the sustained accommodative stance by the Fed, she said.

The Fed kept interest rates near zero and held bond purchases at a $120 billion monthly pace at its meeting ending Thursday. The U.S. non-farm payrolls report is due Friday.

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