Gold Dropping on USD Strength And Doubts About US Stimulus

Gold fell below the psychologically critical $ 1900 level on Monday to record the lowest price in more than a week, on US Dollar strenth and the lack of progress in talks on a new US stimulus package.

Gold spot fell 0.2%to $ 1897.35 an ounce by 0711 GMT, after hitting $ 1890.19, its lowest level since October 15.

On Sunday, US House of Representatives Speaker Nancy Pelosi said that President Trump’s administration was reviewing the latest plan to provide more aid to people affected by COVID-19 and that she expected a response on Monday.

But with the presidential election approaching, analysts say that the victory of Democratic candidate Joe Biden will contribute to the rise of gold thanks to expectations of a huge stimulus package, especially with increasing covid-19 cases.

Gold, widely seen as a hedge against inflation and currency devaluation, has risen 25% this year as central banks and governments announce unprecedented stimulus programs to mitigate the economic fallout from the pandemic.

In the other precious metals, palladium lost 0.8% to 2372.80 dollars an ounce, while platinum fell 2% to 883.14 dollars.

Silver fell 1.8% to $ 24.14 an ounce.