Gold prices plunge amid fading chances of U.S stimulus

GOLD PRICES ENDED A WEEK lower as the White House’s indecision on a new coronavirus relief deal continued to trouble investors dealing in the yellow metal.

U.S gold for December delivery settled at $1,906.40 an ounce on New York’s Comex, down 0.1 per cent.

Spot gold, which reflects real-time trades in bullion, slumped 0.4 per cent at $1,902.06

TD Securities, Canadian investment bank and financial services provider, asserts that the consolidation in gold has likely run its course as the precious metis now tracking closely to other momentum-crash precedents which suggest continued range-bound markets and consolidation until the next catalyst.

Asides the stimulus worries, gold price has been affected by a spike in European Covid-19 caseloads, as Italy again moved near the danger zone witnessed in March while the U.K. and France imposed new movement restrictions to tackle the virus’s re-emergence.

According to Craig Erlam, an analyst at OANDA, a New York based foreign exchange company, gold has aligned itself with riskier assets in 2020, so a number of things could be the catalyst for an explosion higher, be it a COVID vaccine, US stimulus deal, perhaps even a smooth uncontested election.

He stated that the downside risks remain steady which could be the reason the U.S is not in a hurry to make its stimulus or vaccine announcement.

Erlam however projects that gold is likely to shift into $1,900 to $1,975 an ounce as the U.S presidential