Gold prices drifted lower on Wednesday as the dollar climbed up on safe-haven demand after stock prices fell amid mounting worries about growth due to rapid surge in new coronavirus cases across the world.
The dollar index rose to 93.65 before paring some gains. Still, at 93.40, it was up with a fairly strong gain of 0.5%.
Uncertainty about outcome of the upcoming elections, and stalled stimulus talks hurt riskier assets as well as the bullion market.
Investors were also winding up long positions in gold contracts in order to raise margins following a sharp drop in equity markets.
Gold futures for December ended lower by $32.70 or about 1.7% at $1,879.20 an ounce, off the session’s low of $1,869.10. That was the contract’s lowest close since September 25.
Silver futures for December closed lower by $1.211 at $23.359 an ounce, while Copper futures for December settled at $3.0640 per pound, down $0.0295 from previous close.
U.S. President Donald Trump admitted that talks have collapsed for a coronavirus stimulus package before Election Day.
“After the election, we will get the best stimulus package you have ever seen,” Trump told reporters at the White House.
Coronavirus cases surged rapidly in the U.S. and Europe, raising worries of a deepening economic slowdown.
The U.S. reported a record increase in daily infection rate. Nearly 30 states reported record number of infections over the past week.
The situation in Europe is “serious and alarming” and the bloc must be more efficient with testing, contact tracing, vaccine and quarantine policies, the EU Council President, Charles Michel, told Italian daily La Stampa in an interview published today.
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