Gold Could Sustain Weekly Loss, Due to Dollar, Stimulus Hopes

Gold prices decreased on Friday and looked set to post its first weekly drop in three, as the dollar held firm while additional U.S. fiscal stimulus appeared unlikely before the November 3 presidential election.

Spot gold was down 0.1% to $1,906.80 U.S. per ounce, losing 1.2% so far in the week. U.S. gold futures were up 0.2% at $1,912.20.

U.S. President Donald Trump said on Thursday he was willing to raise his offer of $1.8 trillion for a Covid-19 relief deal with Democrats in Congress, but the idea was shot down by his fellow Republican, Senate Majority Leader Mitch McConnell.

The dollar index was headed for its first weekly gain in three, supported by surging coronavirus cases and stalled progress toward U.S. stimulus.

London will soon enter a tighter Covid-19 lockdown as the second wave of the pandemic spreads through Europe. The U.S. Midwest also saw record surges in new cases.

Gold, considered a hedge against inflation risks and currency weakening, has gained nearly 26% so far this year, helped by stimulus from governments and global central banks to revive their economies.

As for other metals, silver fell 0.2% to $24.26 U.S. per ounce, and was down 3.5% for the week.

Platinum dipped 0.1% to $863.39 U.S., while palladium rose 0.1% to $2,354.95 U.S.