Gold traded on Tuesday in a narrow range above $1,900 an ounce as caution spread ahead of a deadline for agreement on a new US coronavirus stimulus package and next month’s presidential election.
Spot gold fell 0.2 percent to $1,901.10 per ounce. US gold futures GCv1 were down 0.4 percent to $1,904.50.
“Sentiment surrounding bullion remains tentative, keeping spot gold around the $1,900-mark, as some… continue to hold out hope that Democrats and the White House can arrive at a deal over the immediate term,” said FXTM market analyst Han Tan.
“Bullion may continue moderating as such hopes wane, when realization sinks in that a fresh round of US fiscal stimulus is likelier to be a postelection event.”
US House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin “continued to narrow their differences” about the package, her spokesman Drew Hammill said.
Pelosi hopes that by the end of Tuesday there will be “clarity” on whether a stimulus bill can be passed before the Nov. 3 election, he wrote on Twitter.
Gold is considered a hedge against inflation and currency debasement amid the unprecedented levels of global stimulus to ease the economic blow from the pandemic.