SMM News: COMEX gold futures closed slightly higher on Friday, but recorded a second consecutive week of decline, traders pay attention to the congressional discussion of the novel coronavirus rescue plan, the trend of the dollar and the upcoming presidential election and other important factors.
Monthly gold futures in COMEX12, the most actively traded, rose 60 cents, or 0.03%, to settle at $1905.20 an ounce, down 1.3% on Thursday, at 13:30 in New York.
The data showed that gold fell for the second week in a row, although the most active contracts fell less than 0.1 per cent from last week.
December silver futures fell 3.4 cents, or 0.1%, to settle at $24.675 an ounce, down 2.1% in the previous session. Silver is still up 1.1% this week.
January platinum futures rose $22.70, or 2.6 per cent, to settle at $906.70 an ounce, up 4.3 per cent this week.
December palladium futures rose $2.70, or 0.1 per cent, to settle at $2398.60 an ounce, up 2.4 per cent this week.
Among other Comex metals, copper for December delivery fell 2.45 cents, or 0.7%, to settle at $3.129 a pound. The highest settlement price for the most active contract since June 2018 closed on Wednesday at $3.199, up 2 per cent this week.
Gold prices fluctuated narrowly on Friday, rising in early trading as investors hoped the US government would unveil a novel coronavirus rescue plan, which could boost buyers of gold to hedge the government's budget deficit. IHSMarket reported that prices fell after the PMI index of services and manufacturing rose in October.
"Gold has found comfort in the $50 range over the past three weeks due to a weaker dollar, an increase in global novel coronavirus cases, pre-election panic and uncertainty about the US economic stimulus package," said LukmanOtunuga, a senior research analyst at FXTM.
"the precious metal is likely to be on standby until new catalysts are available," it said. "
With 11 days to go before Election Day, more than 50 million Americans have voted.
Gold has risen more than 25 per cent so far this year as it is seen as a hedge against inflation because of unprecedented outbreak-related stimulus measures around the world.
The US Congress's negotiations on novel coronavirus's aid are still uncertain, and the details of the scale and scope of the additional rescue package are not clear.
House Speaker Pelosi said on Thursday that negotiations with Treasury Secretary Nuchin were "nearing completion", but Senate Republicans have so far been reluctant to support a spending plan of about $2 trillion. On Thursday, they refused to hold a pre-election vote on the aid package.
White House economist Kudlow said there was little progress in the fiscal stimulus talks on Friday morning and that it would be difficult to reach an agreement with Democrats on the bailout package before the November 3 election. On the same day, House Speaker Pelosi said that if the vote is to be held before the general election, the two sides should prepare documents.
The rise in precious metals prices comes as long-term bond yields have climbed to their highest level since June, with the 10-year Treasury yield at 0.84 per cent on Friday and 0.744 per cent on Friday.
Government bonds can usually compete with gold for safe-haven demand and attract more demand when yields rise.
However, gold is largely in line with the dollar this week, both of which are seen as safe havens for investment.
According to the ICE dollar index, the dollar fell 0.2% on Friday, down nearly 1% over the past week.
TaiWong, head of basic and precious metal derivatives trading at Mandike Bank, said: "the current trend in gold does reflect the trend of the dollar." He added that gold was currently in a "stagnant" range of $1890-$1930 an ounce, pushing it higher every time it hit bottom.
In a report released on Friday, CameronAlexander, head of precious metals research at Refinitiv, expressed optimism about the outlook for gold.
"basic macroeconomic conditions such as economic headwinds, low interest rates, continued tension in Sino-US relations, rising inflation expectations and secondary outbreaks are still very favorable for gold in the medium to long term," it said. "
In the third quarter of this year, central banks became net sellers of gold for the first time in a decade, according to the report. The change is due to a "lack of Russian and Chinese purchases".
Physical gold demand in the third quarter was 562 tons, down 30% from a year earlier, the agency said.
From a technical point of view, gold prices "continue to weaken" below $1910, which could open the way to $1890-$1858, Otunuga said.
However, "A weaker dollar could encourage more than $1910, which could open the door to $1935."
TaiWong, head of basic and precious metal derivatives trading at Mandike Bank, said: "the current trend in gold does reflect the trend of the dollar." He added that gold was currently in a "stagnant" range of $1890-$1930 an ounce, pushing it higher every time it hit bottom.
With 11 days to go before Election Day, more than 50 million Americans have voted.
Gold has risen more than 25 per cent so far this year as it is seen as a hedge against inflation due to unprecedented pandemic-related stimulus measures around the world.
Mr. Cudlow said on Thursday that negotiations on a possible aid deal were under way, but that larger policy differences with Democrats were unlikely to be resolved in less than two weeks before the election.
