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PRECIOUS-Gold faces first weekly decline in 3 as stimulus hopes fade

Credit: REUTERS/Leonhard Foeger

Gold steadied on Friday as the dollar eased but was still set for its first weekly loss in three as doubts over a U.S. stimulus agreement before next month's presidential election dented demand for the metal as an inflation hedge.

* Spot gold down 1% this week; silver down 3%

* Dollar heads for first weekly rise in three

* Focus on Brexit trade deal negotiations

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Recasts, adds comments, updates prices)

By Brijesh Patel

Oct 16 (Reuters) - Gold steadied on Friday as the dollar eased but was still set for its first weekly loss in three as doubts over a U.S. stimulus agreement before next month's presidential election dented demand for the metal as an inflation hedge.

Spot gold was up 0.1% at $1,909.53 per ounce by 0920 GMT but down more than 1% so far this week. U.S. gold futures edged 0.1% lower to $1,907.50.

"The lack of any physical stimulus now until post the U.S. election perhaps saw some liquidation of gold this week," said Robin Bhar, an independent analyst.

"Gold is pretty much watching what other markets are doing, it doesn't really have too much of a catalyst itself to move significantly higher, and equally not much of a catalyst to move significantly lower."

The dollar index was 0.1% lower on the day but still set for a weekly gain, making it more expensive for holders of other currencies to buy gold. [USD/]

U.S. President Donald Trump said on Thursday he was willing to raise his offer of $1.8 trillion for a relief deal with Democrats in Congress, but the idea was shot down by Senate Majority Leader Mitch McConnell.

"The indecisiveness of the administration in Washington on the stimulus is putting a lot of volatility into our markets," said Afshin Nabavi, senior vice president at precious metals trader MKS SA.

"Gold is stuck in a range and we need to break above $1,950 or below $1,850 to be able to have a new direction."

Investors also kept an eye on Brexit trade negotiations, with Prime Minister Boris Johnson set to give Britain's response to European Union demands.

Silver gained 0.3% to $24.37 per ounce, but was down 3% for the week. Platinum fell 0.5% to $859.44 and palladium slipped 0.9% to $2,332.06.

(Reporting by Brijesh Patel in Bengaluru; Editing by Kirsten Donovan) ((Brijesh.Patel1@thomsonreuters.com; Within U.S. +1 651 848 5832, Outside U.S. +91 8067493865; Reuters Messaging: Brijesh.Patel1.thomsonreuters.com@reuters.net)) Keywords: GLOBAL PRECIOUS/ (UPDATE 3)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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