Gold edges up as dollar slips, coronavirus concerns persist

An employee arranges one kilogram gold bars for a photograph at the YLG Bullion International headquarters in Bangkok, Thailand, on Jan. 13, 2016.
Dario Pignatelli | Bloomberg | Getty Images

Gold prices edged higher on Tuesday, helped by a weaker dollar and worries over a second surge in coronavirus cases, although the safe-haven metal held a narrow range as investors' focus on next week's U.S. presidential election.

Spot gold was up 0.4% at $1,909.58 per ounce. U.S. gold futures settled up 0.3% to $1,911.90.

The dollar index slipped 0.3% against its rivals, making gold less expensive for holders of other currencies.

"Gold is stuck in a tight range and there's probably not going to be too much activity before the U.S. election," said Michael Matousek, head trader at U.S. Global Investors.

However, people are still carrying bullish bias on gold because of the coronavirus worries, slowdown in global economies and stimulus measures, which is prompting investors to add gold into their portfolios, he added.

The United States, Russia, France and many other countries are setting records for coronavirus infections, forcing some countries to impose new curbs.

The White House on Tuesday tamped down expectations for a major coronavirus relief package to be agreed upon by the Nov. 3 U.S. presidential election, saying House of Representatives Speaker Nancy Pelosi was seeking too much.

Democratic challenger Joe Biden leads President Donald Trump in national polls but the race is much tighter in battleground states that determine the election outcome.

"Gold's outlook will remain very bullish if Election Day delivers a 'blue wave' that signals massive stimulus on coronavirus relief and infrastructure spending," Edward Moya, senior market analyst at OANDA, said in a note.

Gold, considered a hedge against inflation and currency debasement, has jumped 26% this year amid unprecedented global levels of stimulus during the pandemic.

Elsewhere, palladium fell 0.5% to $2,340.21 per ounce, while platinum rose 1.6% to $883.88.

Palladium could test $2,600 by mid-2021 bolstered by market tightness and stimulus measures, UBS said in a note.

Silver gained 0.6% to $24.46 per ounce.