Commodity Market: Gold edges lower on hints US President Trump could be discharged as soon as Monday

Spot Gold was edging lower on Monday due to optimism regarding US President Donald Trump’s COVID-19 treatment, which weighed on demand for the safe harbor precious metal.

Last week Trump was flown to the Walter Reed National Military Medical Center near Washington DC for treatment after testing positive for COVID-19.

Global risk sentiment received a boost after reports stated US President Trump’s health was improving and he could be discharged as soon as Monday.

But Gold losses were limited, as market players were expecting more clarity on Trump’s condition.

At the same time, according to Harshal Barot, senior research consultant for South Asia at Metals Focus, overall political uncertainty continued to persist in the run-up to the US presidential election.

Developments surrounding negotiations over a new US coronavirus relief package will also continue to be in the markets’ spotlight.

“There is need for new stimulus measures to rally (gold) prices. Without this mojo, there are signs of fatigue creeping into precious metals,” Avtar Sandu, a senior commodities manager at Phillip Futures, wrote in an investor note.

As of 8:52 GMT on Monday Spot Gold was edging down 0.10% to trade at $1,897.36 per troy ounce, while moving within a daily range of $1,887.13-$1,904.35 per troy ounce. The commodity has risen 0.78% so far in October, following a 4.17% slump in September, its worst performance since November 2016.

“$1,850-$1,860 level remains a strong support level for gold … We need a break above $1,940 for any convincing rally to begin again,” Metals Focus’s Harshal Barot said.

Meanwhile, Gold futures for delivery in December were edging down 0.14% on the day to trade at $1,904.95 per troy ounce, while Silver futures for delivery in December were up 0.19% to trade at $24.075 per troy ounce.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was little changed at 93.78 on Monday, while being not far from last Thursday’s one-week low of 93.53.

In terms of macro data, a report by the Institute for Supply Management at 14:00 GMT today may show activity in the US sector of services expanded for a fourth straight month in September.

Near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of October 5th, 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 October 2nd.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,902.07
R1 – $1,914.27
R2 – $1,929.37
R3 – $1,941.57
R4 – $1,953.77

S1 – $1,886.97
S2 – $1,874.77
S3 – $1,859.67
S4 – $1,844.57

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