Gold falls and the dollar strengthened late Tuesday as stimulus talks halt after U.S. President Donald Trump tweeted his call for the end of stimulus relief negotiations until after the presidential election next month.
Less than 24 hours after leaving the hospital, where he was being treated for COVID-19, the president instructed Treasury Secretary Steven Mnuchin to stop negotiations with House Speaker Nancy Pelosi over a multitrillion-dollar stimulus package. Equities dropped after rising hours earlier when Federal Reserve Chairman Jerome Powell had said more stimulus was needed to sustain an economic recovery. Stimulus packages are typically bullish for gold.
“I have instructed my representatives to stop negotiating until after the election when, immediate after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business,” he said on Twitter.
Uncertainty over the economy, the election and Trump’s prognosis put a floor under prices, making gold a more attractive hedge investment. The yellow metal rebounded from Wednesday’s early lows and equities were mixed after Trump called for more support for airlines and the Paycheck Protection Program.
Gold futures fell 0.6% Tuesday to settle at $1,908.80 an ounce on Comex. The December contract has risen $1.20 so far this week. The yellow metal lost 4.2% in September. Gold is up almost $400 — or 25% — so far this year as investors have flocked to gold because of uncertainty from the coronavirus pandemic and the economy. The December contract is currently $1,888.30, while DG spot price is $1,889.40.
Investors are awaiting the release of the minutes from last month’s meeting of Fed policy makers for more of a read on the state of the economy. U.S. Vice President Mike Pence and Democratic vice presidential nominee Kamala Harris are also set to hold their only debate Wednesday evening.
Pandemic-related lockdowns have sent millions of Americans into unemployment.
The virus has killed almost 1.05 million people worldwide and sickened 35.7 million. About 21% of the cases — and 20% of the deaths — are in the U.S. The country has 7.42 million cases, more than any other nation.
Silver futures tumbled 2.6% Tuesday to settle at $23.92 an ounce on Comex. The December contract decreased 0.5% in the first two days of the week. The most active contract plunged 18% in September after gaining 18% in August and soaring 30% in July. The December contract is currently $23.815, while DG spot price is $23.83.
Spot palladium increased 0.3% to $2,326.40 an ounce and gained 3% in the first two days of the week. Spot platinum fell 4.1% Tuesday to $867.50 an ounce and is down 2.4% so far this week. The DG spot price for platinum is currently up at $874.00, while palladium is down at $2,381.40.
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