Gold rose about 1% on Monday as the dollar retreated and expectations for a U.S. stimulus deal ahead of the November 3 presidential elections bolstered bullion’s appeal as an inflation hedge.
Spot gold rose 0.5% to $1,908.22 per ounce. U.S. gold futures rose 0.2% to $1,910.40.
Gold is strengthening on the dollar’s downtrend and “the belief that some kind of stimulus package is going to come through in the next 48 hours,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
“People believe that we’re going to go into an inflationary period into the next quarter. So they’re starting upfront on that.”
The dollar slipped 0.5% versus rivals, making gold less expensive for holders of other currencies.
Gold has gained about 26% so far this year as investors sought refuge from a worsening coronavirus pandemic, and risks of inflation and currency debasement as global central banks slashed interest rates while pumping out unprecedented stimulus to contain the economic blow.
Further underpinning safe-haven demand for bullion were concerns surrounding fresh coronavirus-led restrictions in Europe and elsewhere as worldwide infections crossed over 40 million, as well as uncertainty over the U.S. elections.