By Gina Lee
Investing.com – Gold was up on Friday morning in Asia, climbing up from the one-month low seen during the previous session. A weaker dollar also boosted the yellow metal.
Gold futures were up 0.35% at $1,874.55 by 12:54 AM ET (4:54 AM GMT), remaining below the $1,900 mark. The dollar was down on Friday, although it was poised for its best week since late September.
Any remaining hope that the U.S. Congress would pass the latest COVID-19 stimulus measures before the country’s Nov. 3 presidential election were dashed on Thursday, with White House chief economic adviser Larry Kudlow saying that any deal on the measures would have to wait for now.
Kudlow also accused Hours of Representatives Speaker Nancy Pelosi of “stringing us along,” adding that the Democrats “showed no evidence of compromising on the very key issues. So, we’ll perhaps have to wait [for the measures].”
Uncertainty over the election outcome also remains, even as Democrat candidate Joe Biden maintains his lead over incumbent president Donald Trump in the polls.
On the data front, the U.S.’ third-quarter GDP grew 33.1% quarter-on-quarter, according to an advance estimate released on Thursday. This was the fastest pace of growth since records began in 1947. However, with 41 out of 50 states seeing record numbers of daily COVID-19 cases, the virus’s economic impact is not quite finished.
Europe is also fighting a second wave of cases, with France and Germany to re-enter lockdown from Friday and Monday respectively. The European Central Bank (ECB) handed down its monetary policy on Thursday, where it also committed to take fresh action in December to mitigate the economic impact. Potential ECB actions include more bond purchases and cheap credit for banks.
In Asia, the discount of Chinese gold to international prices is expected to narrow in the fourth quarter, with demand boosted by a recovery in the investment and wedding sector.
The discount "happened because local market demand slowed down dramatically in the first and second quarter … we've seen obvious reductions of the gap in the past quarter. There is still a tiny discount, but it's much smaller ... that gap will be narrower if the local demand recovery situation stabilizes,” Wang Lixin, managing director of the World Gold Council in China, said on Thursday.
"As long as the pandemic stabilizes and there is no second wave in China, I'm sure the trend will continue into Q4,” he added.