Gold set for first loss in three weeks as investors eye US stimulus

Traders will also keep an eye on trade talks between the UK and European Union

FILE PHOTO: A salesman displays gold bars inside a jewellery shop on the occasion of the Akshaya Tritiya festival in the southern Indian city of Hyderabad May 6, 2011. Gold jewellery is a popular gift at marriages and festivals in India. REUTERS/Krishnendu Halder/File Photo
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Gold steadied, heading for the first weekly decline in three, as investors weighed the outlook for fresh US stimulus and rising virus cases in Europe.

Treasury Secretary Steven Mnuchin told House Speaker Nancy Pelosi Thursday that President Donald Trump would personally lobby to get reluctant Senate Republicans behind any deal that they reach. The dollar has been supported during the stalemate, while surging virus cases in Europe have also helped lift the greenback as investors seek safety amid new lockdown measures.

Gold has traded in a narrow range this month on uncertainty surrounding the prospects for a stimulus deal being passed before the November 3 election. The International Monetary Fund has said that more public spending will be needed to complete the economic recovery from the pandemic.

“New offers or withdrawals of negotiations may just be window-dressing ahead of the elections,” said Avtar Sandu, a senior manager for commodities at broker Phillip Futures.

“The concern for precious metals traders, and other financial market players, is the size of the second fiscal stimulus package after the election.”

Spot gold was little changed at $1,908.63 an ounce at 1:36pm in London, on course for a 1.1 per cent decline this week. Spot silver rose 0.4 per cent, palladium fell 1 per cent and platinum added 0.3 per cent. The Bloomberg Dollar Spot Index declined 0.3 per cent, narrowing a weekly gain.

Traders will also keep an eye on trade talks between the UK and European Union. Negotiations are set to continue next week even after Prime Minister Boris Johnson said he believes a trade deal is now unlikely. He said the U.K. will now get ready to leave the bloc’s single market and customs union at the end of the year without a new agreement in place.