The U.S. dollar index.DXY was trading below the 93 mark on Tuesday, while spot gold’s short-term gains accelerated as it neared the $1,910 / oz mark. The dollar’s retreat was positive for gold, while bullion was supported by safe-haven demand as novel Coronavirus infections continued to surge globally, fears of new restrictions in Europe and elsewhere, and the uncertainty of the U.S. presidential election sparked interest in risk aversion. However, investors’ fading optimism about a pre-election stimulus package has helped limit the extent of gold’s rebound.
Spot gold closed higher on Monday as a surge in new COVID-19 cases in the U.S. and Europe led to a drop in global stock markets, prompting safe-haven buying that supported gold prices, although a stronger dollar capped gains on Monday. Spot gold closed at $1,901.84 an ounce on Monday, up 75 cents, after hitting an intraday high of $1,908.20.
A record number of COVID-19 cases were confirmed in the United States in a single day, White House Chief of Staff Jeff Meadows said the administration would no longer contain the epidemic, raising market concerns and talks on a new stimulus bill remain stalled. The Dow Jones Industrial Average closed down 650.19 points, or 2.29%, at 27685.38, after falling more than 950 points. The S&P 500 closed down 62.98 points, or 1.82%, at 3,402.41. The Nasdaq Composite index closed down 189.34 points, or 1.64%, at 11358.94.
White House Chief of Staff Mark Meadows said in an interview with CNN on October 25 that the US is “not going to contain” coVID-19. Meadows said: “We are not going to contain this outbreak. We will have access to vaccines, effective treatments and other means of mitigation.”
Jeff Wright, executive vice President of GoldMining Inc., said gold edged higher on Monday as U.S. stocks fell sharply and data showed a drop in new home sales in September. If the dollar does not strengthen, gold will go higher, he said.
Wright said he sees some interest in risk aversion as the U.S. election approaches and the outcome is uncertain. If this continues for a week, he expects “higher bids and interest for gold”.
Gold’s short-term gains accelerated as the dollar fell back below the 93 level against a basket of currencies in Asian trading on Tuesday, hitting as high as $1,909.35 an ounce.
The number of coVID-19 cases has surged globally
As the global epidemic continues, Spain is again in a state of national emergency and France has recorded a fourth consecutive day of confirmed cases. The US has entered the third wave of the epidemic and recently returned to the top of the world in terms of the number of new confirmed cases in a single day. The US also continues to have the world’s highest cumulative number of confirmed cases and deaths.
World real-time statistics show that the cumulative number of confirmed coVID-19 cases worldwide has exceeded 43.77 million. The cumulative number of deaths has exceeded 1.164 million. The total number of confirmed COVID-19 cases in the United States exceeded 8.96 million; The cumulative number of deaths has exceeded 231,000.
According to US media reports, the number of COVID-19 cases in the US continues to surge, with the number of hospitalizations in many places reaching a post-outbreak peak. At least 39 of the 50 STATES now have the highest number of hospitalizations since the outbreak began, CBS news reported.
Anthony Fauci, director of the US National Institute of Allergy and Infectious Diseases, said on October 26 that the current surge in coVID-19 cases is not a sign of a second wave, because the first wave is never over. “We have not seen epidemic data fall below a good baseline,” Fauci said. It’s been going up and up and up and up until now we’ve reached unprecedented highs, and that’s really dangerous.”
On October 26, local time, the World Health Organization (WHO) held a regular press conference on COVID-19. The number of coVID-19 cases reported globally last week was the highest since the outbreak began, with the number of cases and hospitalizations rising in many countries in the Northern Hemisphere, WHO Director-General Tedros Adhanom Ghebrev said. Intensive care units are becoming saturated in some places, especially in Europe and North America. Governments need to understand the local epidemic, break the chain of transmission, conduct extensive testing, isolate and care for cases, and track and isolate all contacts.
With eight days until election Day, the Senate is scheduled to adjourn late Monday local time before lawmakers leave Washington. Failure to reach a deal would essentially mean that the bill could not be written, voted on and signed by Mr. Trump before the Nov. 3 election.
“The global virus epidemic is accelerating, stimulus talks in Washington are still in limbo, and there is heightened nervousness ahead of the U.S. presidential election,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.
“In the short term, the stock market is likely to fall, the virus is back and the election uncertainty is heightened because of the stimulus disappointment,” said Julian Emanuel, strategist at BTIG.
Christopher Vecchio, senior currency strategist at I.G. Group in New York, said it was now unlikely that any new stimulus package would be announced before November 3. This will keep the market range-bound in the short term.
National Australia Bank (NAB) currency analyst Ray Attrill said hopes of a fiscal deal before the U.S. election were fading.
Peter Hug, head of global trading at Kitco Metals, said: “There is one catalyst that could push gold higher ahead of the election and that is some kind of stimulus package. With each passing day, that becomes less and less likely. But the market is still waiting.” Hug points out that if there is a stimulus by the end of the week, gold could break above $1,925.