Commodity Market: Gold looks set for sharpest monthly loss since November 2016, investors eye Trump-Biden debate

Spot Gold edged lower at the start of the new week, as the US Dollar held on to recent gains near a two-month peak against major peers ahead of the first presidential election debate between US President Trump and Democrat Joe Biden.

The commodity was set to register its biggest monthly loss since November 2016, while being down 5.60% so far in September.

A stronger dollar makes Gold costlier for international investors holding other currencies.

“Gold is going to be driven by the tenor of the U.S. dollar,” Stephen Innes, chief market strategist at AxiCorp, said.

“The big move is going to probably occur after the presidential debate when we have a better read on where the polls are going to be sitting.”

Also on investors’ radar will be any developments regarding US new fiscal stimulus package, after House Speaker Nancy Pelosi said over the weekend an agreement could be reached with the Trump administration on coronavirus relief and negotiations were still underway.

According to AxiCorp’s Innes, both sides are not expecting “a big deluge but some sort of middle ground.”

As of 9:23 GMT on Monday Spot Gold was retreating 0.41% to trade at $1,854.00 per troy ounce, after earlier touching an intraday low at $1,848.80, or a price level not seen since July 22nd ($1,841.03).

Meanwhile, Gold futures for delivery in December were edging down 0.34% on the day to trade at $1,860.00 per troy ounce, while Silver futures for delivery in December were down 0.88% to trade at $22.890 per troy ounce.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was inching down 0.04% on Monday to 94.54, while remaining not far from last Friday’s two-month high of 94.74.

Near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of September 28th, investors saw a 100.0% chance of the Federal Reserve keeping borrowing costs at the current 0%-0.25% level at its policy meeting on November 4th-5th, or unchanged compared to September 25th.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,863.15
R1 – $1,873.69
R2 – $1,885.75
R3 – $1,896.29
R4 – $1,906.82

S1 – $1,851.09
S2 – $1,840.55
S3 – $1,828.49
S4 – $1,816.42

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