Gold steadies ahead of Trump-Biden debate

Gold prices steadied on Tuesday alongside a subdued US dollar, while investors awaited the first US presidential debate and further developments on a new US coronavirus relief bill.

Spot gold was little changed at $1,881.59 per ounce by 0740 GMT, after gaining 1.1% in the previous session, its biggest one-day gain since late August. US gold futures were up 0.2% at $1,886.60.

The dollar index held steady against a basket of currencies, following its biggest daily percentage drop in a month on Monday.

A weaker dollar makes gold cheaper for holders of other currencies.

"There is this uncertainty in the market pertaining to the US elections and the possibility of a fresh US stimulus, given these uncertainties the overall trade in the market is likely to be choppy," said Harshal Barot, senior research consultant for South Asia at Metals Focus.

"Leading up to the elections we could see this volatility continue before (gold) market could get a definite direction on either side." 

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US House of Representatives Speaker Nancy Pelosi said on Monday that Democratic lawmakers unveiled $2.2 trillion relief bill. But it wasn't specified when there would be a vote on the proposal.

Gold, viewed as a hedge against inflation and currency debasement, has risen over 20% this year, mainly supported by unprecedented stimulus measures by governments and central banks worldwide to revive their coronavirus-battered economies.

Investors now braced for the presidential debate between President Donald Trump and Democratic nominee Joe Biden, with five weeks to go until the Nov. 3 general election.

On the technical front, spot gold could break a resistance at $1,886 and rise to $1,911 per ounce, having failed twice to break a support at $1,855, according to Reuters technical analyst Wang Tao.

Elsewhere, silver fell 0.4% to $23.62 per ounce, platinum dipped 0.2% to $877.15, while palladium edged 0.1% to $2,257.38.

Reuters