Gold headed for a weekly decline, snapping two weeks of gains, as investors weighed the outlook for fresh US stimulus and the trajectory of the dollar ahead of the presidential election.
Treasury Secretary Steven Mnuchin told House Speaker Nancy Pelosi Thursday that President Donald Trump would personally lobby to get reluctant Senate Republicans behind any deal that they reach.
Trump said he’s willing to go beyond the $1.8 trillion offer for a virus relief plan that’s already been offered by the administration, but Senate Majority Leader Mitch McConnell rejected that, saying GOP lawmakers won’t go along.
Gold’s been trading in a narrow range so far in October amid uncertainty surrounding the prospects for a stimulus deal being passed before the November 3 election. The International Monetary Fund has said that more public spending will be needed to complete the economic recovery from the pandemic.
With sentiment shifting on stimulus developments, “new offers or withdrawals of negotiations may just be window-dressing ahead of the elections,” said Avtar Sandu, senior manager for commodities at broker Phillip Futures Pte. “The concern for precious metals traders, and other financial market players, is the size of the second fiscal stimulus package after the election.”
Spot gold was steady at $1,907.20 an ounce at 6:20 a.m. in London, 1.2% lower this week. The Bloomberg Dollar Spot Index was little changed, up 0.8% this week. Spot silver, palladium and platinum were little changed.