Gold steadied in a tight range on Thursday after falling 2 per cent the previous day as caution crept in ahead of the US elections, with bullion also contending with the dollar as a refuge for investors hedging risks from mounting COVID-19 cases.
Spot gold was flat at $1,877.01 per ounce by 1028 GMT (3.58 pm in India). US gold futures slipped 0.1 per cent to $1,877.60.
“No one really wants to take any aggressive positions ahead of the election,” said StoneX analyst Rhona O’Connell.
“Prior to that, there’s the stimulus talk, and obviously we’ve got the pandemic running in the background, but it’s all been centred on Washington over the last three, four weeks or so, and I very much doubt you’d get any volatility until after the election.”
Ahead of the November 3 election, Democratic challenger Joe Biden leads US President Donald Trump nationally, but the competition is tighter in swing states.
The dollar index held close to a one-week peak scaled in the previous session, benefiting from safe-haven inflows as Germany and France imposed fresh lockdowns to stem a second coronavirus wave.
“You currently see a move out of the risky assets into safe havens, but the safe haven has been the US dollar,” said Quantitative Commodity Research analyst Peter Fertig.
But gold, considered an inflation-hedge, was still up 24 per cent this year, helped by near-zero interest rates globally and unprecedented stimulus measures.
Meanwhile, the European Central Bank was expected to hold off on any new support measures at a meeting later in the day and rather hint at action in December.
On the physical front, the World Gold Council expected gold demand to improve into year-end in traditional top buyers China and India after slumping for most of this year.
Silver dipped 1 per cent to $23.18 per ounce, platinum fell 0.5 per cent to $863.36 and palladium was down 0.5 per cent at $2,225.83.