Gold futures on Tuesday were retreating, but holding above a key level around $1,900, amid progress toward vaccines and a long-sought fresh round of coronavirus relief for American workers and businesses hobbled by the pandemic.
A subsequent climb in government bond yields, perhaps, tied to the advancement of negotiations between lawmakers, also may be nudging bullion prices lower on the session, but the longer-term outlook for bullion under a regime of greater fiscal aid is still expected to be bullish, according to experts.
Late Monday, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin “continued to narrow” a range of differences in outlining another phase of aid that the Speaker says must be achieved by the end of Tuesday if an accord is to be struck before Election Day on Nov. 3.
Meanwhile, the CEO of Moderna Inc. said that the federal government could authorize an emergency use of its COVID-19 vaccinecandidate by December if testing of the experimental drug goes well, speaking during the Wall Street Journal’s annual Tech Live conference Monday.
The comments come after Pfizer Inc. said that an antibody treatment to combat the deadly illness could receive similar authorization by November if not the end of the month.
Reports of remedies and treatments for the illness that has stricken some 40 million globally since late last year have often prompt some selling in bullion, but enthusiasts in precious metals point to expected increases in government balance sheets and low interest rates prevailing across much of the developed world as causes for continued optimism around gold and silver.
December gold was shedding $7.20, or 0.4%, at $1,904.50 an ounce, following a 0.3% gain on Monday, while silver futures for December delivery were adding 2.7 cents, or 0.1%, at $24.725 an ounce, following a 1.2% rise in the previous session.
The acceleration of viral spread in Europe has been underpinning some of the recent demand for bullion, as well as concerns about the outcome and the market’s reaction to the U.S. presidential election between Democrat and former Vice President Joe Biden and incumbent Donald Trump.
“The gold price is trying its best to stay above the 100-day moving average on the daily time frame, and only time will tell if it will win this war,” wrote Naeem Aslam, chief market analyst at AvaTrade in a note. “One thing is pretty certain that bulls aren’t giving in that easily. This is because there is just too much uncertainty concerning the U.S. elections and coronavirus, which are keeping traders interested in gold prices,” he wrote.
Moves for the commodities come as bond yields have been seeing a weekly rise, that may take some luster away from gold, because rising bond yields can compete against precious metals for haven demand.
The 10-year Treasury note yield was up over 2 basis points at around 0.78%, with market participants attributing some of the gain to expectations of greater government spending—a drag on bond prices—when and if a fiscal package is delivered. Bond prices move in the opposite direction of yields.
Gold prices soften their decline somewhat after a report on U.S. home builders showed that construction on homes came in at a seasonally-adjusted annual rate of 1.42 million in September, representing a 1.9% increase from the previous month’s lowered figure, the U.S. Census Bureau reported Tuesday.
Among other metals, December copper tacked on 1.3% to $3.125 a pound. January platinum added 1.2% to $873.40 an ounce and December palladium traded at $2,392.20 an ounce, up 1.5%.