Gold heads for first weekly drop in three as investors weigh outlook for fresh US stimulus

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Gold's been trading in a narrow range so far in October.
Gold's been trading in a narrow range so far in October.
Jack Vearey/ Getty

Gold headed for a weekly decline, snapping two weeks of gains, as investors weighed the outlook for fresh US stimulus.

Treasury Secretary Steven Mnuchin told House Speaker Nancy Pelosi Thursday that President Donald Trump will personally lobby to get reluctant Senate Republicans behind any stimulus deal they reach.

Trump said he's willing to go beyond the $1.8 trillion offer for a virus relief plan that's already been offered by the administration, but Senate Majority Leader Mitch McConnell rejected that, saying GOP lawmakers won't go along.

Gold's been trading in a narrow range so far in October amid uncertainty surrounding the prospects of a stimulus deal being passed before the 3 November presidential election. The International Monetary Fund has said that more public spending will be needed to complete the economic recovery from coronavirus.

With market sentiment shifting on bits and pieces of news on U.S. stimulus negotiations and elections looming, "any new offers or withdrawals of negotiations may just be window dressing ahead of the elections," Avtar Sandu, senior manager for commodities at broker Phillip Futures Pte in Singapore, said in a note. "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 steady at $1,907.67 an ounce at 11:13 a.m. in Singapore, 1.2% lower this week. The Bloomberg Dollar Spot Index was little changed.

Spot silver, palladium and platinum were also little changed.

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