Gold climbed to trim a third monthly drop, the longest run since 2019, as investors awaited next week's US presidential election amid the threat of rising coronavirus cases and lack of agreement on a U.S. stimulus plan.
Uncertainty remains high before the pivotal November 3 vote, lifting the dollar's appeal as a haven asset over bullion. The spread of Covid-19 is intensifying in the US where new cases topped 86 000, setting a fresh daily record, and the pandemic is resurgent right across Europe's major economies.
Since hitting a record around $2 075 an ounce in August, gold's advance has faltered, with prices losing their upward momentum as investors questioned whether bullion had risen too far, too fast. Still, holdings in exchange-traded funds remain close to an all-time high. The macro backdrop for gold remains favorable, and there could be more upside if Joe Biden wins the presidency and Democrats take control of the Senate, Standard Chartered Bank has said.
"From now to the election, we suspect the precious metals will be highly volatile," James Steel, chief precious metals analyst at HSBC Securities (USA), said in a note. "Increases in risk-off sentiment tend to buoy USD, which weakens gold and silver. But we think this will only go so far. With Covid-19 concerns rising and the election coming, we think gold and silver will remain volatile, but will garner more support from safe-haven demand."
Spot gold climbed 0.5% to $1 877.23 an ounce at 11:46 a.m. in Singapore, after posting the lowest close since September 25 on Thursday. So far this month, it's lost 0.5%. Silver rose 1.2%, platinum added 1.2% and palladium advanced 1%. The Bloomberg Dollar Spot Index fell 0.1% from a three-week high.
On stimulus, there's deadlock in the US but the prospect of more action in Europe. Treasury Secretary Steven Mnuchin accused House Speaker Nancy Pelosi of pulling a "political stunt" by refusing to offer compromises. Meanwhile, European Central Bank President Christine Lagarde said there is "little doubt" policy makers will agree on a new package in December