By Barani Krishnan
Investing.com – Gold stayed in the green lane for a third straight day on Tuesday and above the key $1,900 level as Covid-19 caseloads continued to dominate headlines, keeping risk appetite on a tight leash.
The yellow metal also gained ground against the dollar as a haven, helping its push higher.
The Dollar Index, which pits the greenback against six major currencies, was down 0.2% at 92.84 by 2:00 PM ET (18:00 GMT). Due to its standing as a reserve currency, the dollar has been the alternative haven to gold on various long stretches over the past two months, forcing the precious metal off record highs above $2,000 an ounce.
Spot gold, which reflects real-time trades in bullion, rose by $6.58, or 0.4%, to $1,908.71 as the dollar fell.
U.S. gold for December delivery settled the day’s trade at $1,911.90, up $6.20, or 0.3%.
The United States reported more than 74,300 new coronavirus cases on Monday, pushing the country’s daily average over the past week above 71,000, the most in any seven-day stretch of the pandemic.
In Europe, France prepared for a fresh lockdown as new daily confirmed coronavirus cases hit the highest ever, at above 52,000 on Sunday. Former world hotspot Italy also had a new record high of cases as did the Netherlands. Spain has declared a national emergency and imposed a night-time curfew. Vaccine developer Pfizer (NYSE:PFE), meanwhile, said getting early results by October for a Covid-19 shot would be nearly impossible.
“Investor’s concerns about the consequences of the second Covid-19 wave, with infections soaring in the US and in the major European economies, have crushed appetite for risk, boosting demand for the US dollar and weighing on the dollar-denominated gold,” Guillermo Alcala, a commentator on gold, said in a post on ForexLive.
Also keeping risk-takers in equities on the back foot were renewed U.S.-China tensions on the back of a potential sale of American-made missiles to Taiwan. Wall Street’s Dow was down 0.5% in late afternoon trade as Comex gold settled.
Uncertainty about whether President Donald Trump gets to keep the White House or whether his challenger Joe Biden will make a clean sweep in Nov. 3 elections prodded more investors toward safe havens, analysts said.
“Gold’s outlook will remain very bullish if Election Day delivers a ‘blue wave’ that signals massive stimulus on coronavirus relief and infrastructure spending,” Edward Moya, senior market analyst at OANDA, said, referring to Biden’s blue, or Democratic, party.