By Adam Claringbull
Investing.com – Gold was down on Thursday morning in Asia as the dollar gained strength. Deadlocked U.S. COVID-19 stimulus talks kept the greenback up.
Gold futures were down by 0.30% at $1,901.55 by 11:58 PM ET (3:58 AM GMT).
Gold fell in morning trade, with the dollar strengthening as investors looked to the safe-haven currency against the increasing likelihood of no U.S. COVID-19 relief measures being in place before the Nov. 13 U.S. elections. A rapid rise in new coronavirus cases in Europe is also pushing the dollar, with new restrictions coming into force.
In the U.S., negotiations over COVID-19 stimulus have stalled, with House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin unable to reach agreement over the details of any package.
Treasury Secretary Steven Mnuchin had this to say: “The clock will not stop ... I’d say, at this point, getting something done before the election and executing on that would be difficult, just given where we are in the level of details, but we’re going to try to continue to work through these issues.”
European COVID-19 cases continue to rise in the major economies, with Germany, the U.K., and France all beginning to put in place further restrictions such as closing schools and introducing regional lockdowns. The threat to economic recovery sent investors toward the greenback and safe-haven investments, reducing any appetite for risk.
The world's mines will produce 3,368 tonnes of gold this year, down 4.6% from 2019 and the lowest in 5 years, but high bullion prices will help to push up output by 8.8% to a record 3,664 tonnes in 2021, consultancy Metals Focus said on Wednesday.
The likely extension of the Brexit trade deal discussions also gave the yellow metal downward pressure, with talks between Britain and the E.U. now likely to be extended beyond U.K. Prime Minister Boris Johnson’s self-imposed cut-off date of Oct. 15.
Markets are currently looking to the outcomes of this week’s European Central Bank and International Monetary Fund meetings for indications of market direction.