Gold prices eased on Tuesday, trading in narrow a range, as caution set in ahead of the deadline to reach an agreement on a new U.S. coronavirus stimulus package and the upcoming presidential election.
Spot gold fell 0.2% to $1,901.16 per ounce by 0335 GMT. U.S. gold futures were down 0.3% at $1,905.20.
“A lot of investors are on the sidelines and also in particular because the (U.S.) elections are coming up,” Brian Lan, managing director at Gold Silver Central said, adding that a stimulus will make prices test the higher end of the $1,882-$1,932 range.
U.S. House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin “continued to narrow their differences” about a fresh aid package in a telephone conversation, her spokesman Drew Hammill said.
Pelosi hopes that by the end of Tuesday there will be “clarity” on whether a coronavirus stimulus bill can be passed before the Nov. 3 elections, he wrote on Twitter.
A massive stimulus from the Democrats could revive precious metals trading as they have been losing their mojo without additional stimulus, Avtar Sandu, a senior commodities manager at Phillip Futures, said in a note.
Gold prices is considered a hedge against inflation and currency debasement amid the unprecedented levels of global stimulus to ease the economic blow from the pandemic.
Investors now eye the final debate between U.S. President Donald Trump and his Democratic challenger Joe Biden on Thursday to see if it shifts the trajectory of the election.
The dollar index .DXY was flat against its rivals, while Asian stocks slipped as investors adjusted risk exposure heading into the U.S. election. Elsewhere, silver fell 0.1% to $24.47 per ounce.